UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

X ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, ~~2011~~2012

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number 000-22852

GOOD SAM ENTERPRISES, LLC

(~~formerly~~Exact ~~Affinity~~name ~~Group,~~of ~~LLC~~registrant as specified in its charter)

Delaware		13-3377709
(State of incorporation or organization)		(I.R.S. Employer Identification No.)
250 Parkway Drive, Suite 270		(847) 229-6720
Lincolnshire, IL 60069		(Registrant’s telephone
(Address of principal executive offices)		number including area code.)

250 Parkway Drive, Suite 270

Lincolnshire, IL 60069

(Address of principal executive offices, Zip Code)

(847) 229-6720

(Registrant’s telephone number, including area code)

SECURITIES REGISTERED PURSUANT TO SECTION 12 (b) OF THE ACT: NONE

SECURITIES REGISTERED PURSUANT TO SECTION 12 (g) OF THE ACT:

11.5% Senior Secured Notes Due 2016

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

YES NO X

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.

YES NO X NO

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the ~~Registrant~~registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ~~YES X NO~~ *

YES X NO

*The issuer has filed all Exchange Act reports for the preceding 12 months.

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

YES X NO

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer or a smaller reporting company. See ~~definition~~definitions of “large accelerated filer,” ~~and~~“ ~~large~~ accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act). (Check one):

Large Accelerated filer ~~Large~~ ~~accelerated~~Accelerated filer Non-accelerated filer X (Do not check if smaller Smaller reporting company reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

YES NO X

~~Indicate~~The ~~the~~aggregate ~~number~~market value of ~~shares~~the ~~outstanding~~voting ofand ~~each~~non-voting ofcommon equity held by non-affiliates computed by reference to the ~~issuer’s~~price ~~classes~~at ofwhich the common ~~stock~~equity was last sold, was $0 as of the ~~latest~~last ~~practicable~~business ~~date~~day of the registrant’s most recently completed second quarter.

		Outstanding as of
Class		March 16, 2012
Membership Units, $.001 par value		2,000

PART I

ITEM 1: BUSINESS

General

Except where the context indicates otherwise, the term “Company,” or “GSE” means Good Sam Enterprises, LLC and its predecessors, and subsidiaries. Our predecessor, Affinity Group, Inc., was incorporated as a Delaware corporation on September 25, 1986. On March 2, 2011, Affinity Group, Inc. converted the form of its organization from a corporation to a limited liability company called Affinity Group, LLC. On May 2, 2011, Affinity Group, LLC changed its name to Good Sam Enterprises, LLC by filing a Certificate of Amendment to its Certificate of Organization with the Secretary of State of Delaware.

We are a wholly-owned subsidiary of Affinity Group Holding, LLC, (the “~~AGHI~~Parent”), a privately-owned ~~corporation~~limited liability company. We are a leading direct marketer, specialty retailer and publisher targeting North American recreational vehicle (“RV”) owners and outdoor enthusiasts. Our core audience is the estimated 30 million RV enthusiasts in North America and the approximately nine million households in North America that own at least one RV. Our unique business model is based on “affinity marketing,” in which our membership club members and retail customers form a receptive audience to which we sell products, services, merchandise and publications targeted to their specific recreational interests. ~~Through~~Our ~~our~~ long operating history ~~dating~~dates back approximately 75 years, wewith ~~have~~our ~~built~~publishing businesses and our Good Sam Club dates back 46 years. This long history has enabled the development of a rich database of approximately ~~nine~~ten million RV enthusiasts who have purchased our products or services, subscribed to our publications or have otherwise indicated an interest in the RV lifestyle.

We operate through three complementary business segments that together provide the most comprehensive product and service suite to the RV and outdoor enthusiast market:

· Membership Services:

· Membership Clubs: Our membership clubs represent approximately 7%, 9%, and 9% of revenues. for 2012, 2011 and 2010, respectively. We operate ~~primarily~~two ~~four~~ membership clubs totaling approximately 1.7 3 million club members, including the ~~two~~ largest ~~clubs~~club in the RV market - Good Sam Club, and ~~President’s~~Coast to Coast Club. These clubs ~~represent~~represents some of the most recognizable brands within the RV community and ~~offer~~offers a wide variety of potential discounts and benefits, the average estimated value of which significantly exceeds the cost of membership. The ~~These~~Good ~~clubs~~Sam Club and the Camping World President’s Club were combined effective January 1, 2012 under the name Good Sam Club, providing greater member benefits, less brand confusion and lower renewal cost. ~~After combination of the two clubs, total members are approximately 1.3 million.~~ Our membership clubs have experienced an average five year ~~renewal~~retention rate of approximately 6474%.

· Ventures: Our membership services segment includes ventures with third party providers which represent approximately 22%, 21% and 22% of revenues for 2012, 2011 and 2010, respectively. Our club members, retail customers and publication subscribers form a receptive audience for us to offer our safety, finance and security products and services that enhance the RV experience, including (i) ~~emergency~~ ~~road~~roadside assistance services (“~~ERS~~RA”), (ii) property and casualty insurance programs, (iii) mechanical breakdown insurance through our extended service plans (“ESP”), (iv) vehicle financing, (v) credit cards and (vi) emergency assistance services. We have limited liability exposure, as the majority of our products and services are provided by third parties who pay us a marketing fee. Our products and services generate significant value, with an average renewal rate of 8381% over the last five years. Through our long operating history dating back approximately 75 years, we have built a rich database of approximately nine million RV enthusiasts who have purchased our products or services, subscribed to our publications or have otherwise indicated an interest in the RV lifestyle.

· Media:

Our media segment represents approximately 11% of revenues. Through our publications and consumer events, the media segment helps create awareness of our brand in the RV community, attracts RV enthusiasts and owners and builds our customer database. We publish and distribute 27 specialty publications for select markets in the recreation and leisure industry, including general circulation periodicals, club magazines, campground directories, and RV industry trade magazines, with aggregate circulation of approximately 4.0 million and approximately 650,000 paid subscribers. In addition, we operate over 50 websites, primarily as companion sites to print publications that offer more detailed reference information. We believe that the targeted audience of each of our publications is an important factor in attracting advertisers, which include manufacturers of RVs and RV-related products, campground operators and large national RV dealerships as well as manufacturers of power sports vehicles and accessories. We also operate 29 consumer outdoor recreation shows at 23 venues in 19 cities, which are primarily RV, boat and sport shows. The total audience of RV, boating, powersports and outdoor recreation enthusiasts who attend our shows exceeds 250,000 annually.

· Retail:

Our retail segment, Camping World, represents approximately 63%, 59%, and 57% of revenues. for 2012, 2011, and 2010, respectively. With a nationwide footprint of 8293 Camping World retail and service stores in 32 states, we are the only national specialty retailer of aftermarket parts and accessories and the largest national provider of repair and maintenance services exclusively serving the North American RV industry. We believe that Camping World’s leading position in the RV accessory industry results from a high level of brand recognition, an effective triple channel distribution strategy (stores, catalogs and online) that allows us to reach our customers at home or on the road, and a commitment to offer a broad selection of specialized RV products and services combined with technical assistance and on-site installation.

· Membership Services - Media:

Our membership services -media segment represents approximately 8%, 11% and 12% of revenues for 2012, 2011, and 2010, respectively. Through our publications and consumer events, the Membership Services - Media segment helps create awareness of our brand in the RV community, attracts RV enthusiasts and owners and builds our customer database. We publish and distribute 18 specialty publications for select markets in the recreation and leisure industry, including general circulation periodicals, club magazines, campground directories, and RV industry trade magazines, with aggregate circulation of approximately 2.6 million and approximately 700,000 paid subscribers. In addition, we operate more than 40 websites, primarily as companion sites to print publications that offer more detailed reference information. We believe that the targeted audience of each of our publications is an important factor in attracting advertisers, which include manufacturers of RVs and RV-related products, campground operators and large national RV dealerships as well as manufacturers of power sports vehicles and accessories. We also operate 26 consumer outdoor recreation shows at 23 venues in 19 cities, which are primarily RV, boat and sport shows. The total audience of RV, boating, powersports and outdoor recreation enthusiasts who attend our shows is approximately 250,000 annually.

Industry Overview

We believe that both the size of the installed base of RVs and RV usage are the most important factors affecting the demand for our membership clubs, merchandise, products, services and publications. Our core audience is the roughly 30 million RV enthusiasts in North America and the approximately nine million installed base of RVs (defined as the total number of RVs currently in operation in the United States), as estimated by the Recreation Vehicle Industry Association (“RVIA”). According to the National Survey of the RV Consumer published by the University of Michigan in 2011 (the “RV Survey”), during the past forty years, the average yearly sales of traditional RVs was just over 280,000 units. Additionally, the total number of households owning RVs was approximately 6.9 million in 2001, 7.9 million in 2005 and 8.9 million for 2011.

Another factor attributed by the RVIA to an increase in the installed base of RVs is the positive demographic trend that indicates RV ownership increases with age. According to the RV Survey, the median age of RV owners was 48 in 2011, with ownership rates reaching its highest percentage level, 11.4%, among those 45 to 54 years old~~, or 11~~.~~4%.~~ The RV Survey revealed that high RV ownership rates now extend across a 40-year span from age 35 to 75. In addition, we believe the aging of the baby boomers will grow the pool of potential RV enthusiasts and owners. Furthermore, according to the U.S. Census Bureau, the over-45 population in the United States is expected to grow from approximately 127 million in 2010 to approximately 167 million in 2030, which we believe should have a positive impact on RV ownership and usage. According to the RV Study, RV ownership is also concentrated in the western United States, an area in which the population growth rate continues to be greater than the national average. The RV Survey also indicates that RV ownership is associated with higher than average annual household income, which among RV owners was approximately $75,000 per annum in 2011 as compared to the national average of $67,530 per annum in 2010.

Furthermore, despite fuel price increases, RV trips remain the least expensive type of vacation according to a study entitled “Family Vacation Cost Comparison” conducted by PKF Consulting in 2008 (the “PKF Study”). The PKF Study also noted that an RV vacation is typically 27% to 61% less costly than other comparable types of vacations studied. While fuel costs are a component of overall vacation costs, the PKF Study determined that fluctuations in fuel prices should not be a significant factor affecting a family’s decision to take RV trips.

Our Competitive Strengths

We believe that our key competitive strengths are as follows:

Attractive Industry Demographics and Stable Installed Base. Favorable demographic trends indicate that RV ownership should increase during the next several years. According to the RV Survey, overall RV ownership rates have historically been highest in the 45-64 age bracket, representing 22.5% of RV ownership. Also, the RV Survey stated that RV owning households reached 8.9 million in 2011. We believe the aging of the baby boomers is projected to generate growth in the pool of potential RV consumers, with the over age 45 population in the U.S. expected to grow from approximately 127 million in 2010 to approximately 167 million in 2030. In addition, RV owners have household incomes that generally exceed the national average. We believe that these demographics are attractive for advertisers and third-party providers of our products and services.

Substantial Barriers to Entry. We believe we hold a dominant market position within the RV industry due to our existing database of approximately ~~nine~~ten million RV enthusiasts and the penetration of our products and service offerings to this customer segment. We believe it would be prohibitively expensive to replicate the size and quality of information contained in our database. Through our marketing channels, we are able to collect ~~valuable~~market data on RV owners and enthusiasts and based on such data, we offer valuable products and services to a targeted audience that we believe will be highly likely to purchase our offerings. By offering products and services to a targeted audience we are able to lower our overall marketing costs, improve our profitability and reduce the price offered to consumers, which improves our value proposition relative to our competitors. Within our membership club segment, Good Sam Club, which was founded in 1966, ~~and~~is ~~President’s Club, founded in 1985, are~~ the largest RV membership ~~clubs~~club in North America. in terms of number of members. Within our retail segment, Camping World, which has grown to 8293 retail stores since inception, is the largest and only national specialty retailer of merchandise accessories and services for RV owners and camping enthusiasts. Through publications and events, we are able to ~~continually~~ create awareness of our brands in the RV community and attract RV owners and enthusiasts.

Nationwide Footprint. Within our retail segment, Camping World is the largest and only national specialty retailer of merchandise accessories and services for RV owners and outdoor enthusiasts, with 8293 retail stores in 32 states. In 2003, we began a strategy of expanding our footprint in order to more effectively serve our customers whether they are at home or on the road. We opened a total of 5973 stores since that time, targeting high traffic, convenient sites located adjacent to major interstates, where customers live, or near major RV destinations.

Comprehensive Product and Service Offerings Allow Us to Deliver Substantial Value to Our Members. We believe our comprehensive suite of product and service offerings relative to our competition is a meaningful advantage that provides us greater leverage to negotiate benefits and discounts with third-party service providers for our members. Further, ~~The~~we believe that the savings that are provided to our members as a result of these benefits and discounts have outweighed increases in membership dues. Our approximately 1.73 million club members and the approximately ~~nine~~ten million consumers in our proprietary database serve as a unique, receptive audience for direct marketing, which we believe significantly lowers customer acquisition costs relative to our competitors and facilitates cost-effective cross-selling. We believe our leading position within the retail market allows us to leverage our buying power, enabling us to purchase our inventory at what we believe are competitive prices. Our retail pricing strategy is to pass along our low merchandise costs to our customers.

Stable Recurring Cash Flow. Approximately 7679% of our operating income, net of non-recurring, non-cash charges, is generated through our non-retail based businesses, which historically has provided a recurring income stream through a core base of loyal customers. Our ~~four~~two ~~primary~~ membership clubs (the Good Sam Club and the Coast to Coast Club) have an average five year ~~renewal~~retention rate of approximately 6474%, which we believe compares favorably to other subscription-based businesses. Similarly, our membership-based products and services have historically ~~also~~ experienced high renewal rates, averaging approximately 8381% over the past five years for our largest product and service offerings, ~~ERS~~roadside assistance, RV insurance and extended service plans.

Significant Operating Leverage. We have implemented a successful strategy to manage operations through the recent economic ~~cycle~~downturn. Our disciplined cost saving initiatives have included work force, payroll and employee benefit reductions, office consolidations, right sizing magazine titles, and procurement, marketing and selling expense savings, creating significant operating leverage and improving our cost position.

Experienced and Successful Management Team. With an average of ~~thirteen~~fourteen years with our Company and an average of nineteen years in the industry, our executive management team has a proven track record in direct marketing, retail and media in the RV industry. In addition to the recent successful implementation of cost saving initiatives, the team has developed substantial experience in increasing our target customer base, using strategic alliances to bolster product offerings that create value for our customers and increasing cross-selling opportunities for our high margin product offerings.

Our Business Strategy

Maximize Customer Retention with Value-Added Product Offerings. A key aspect of our strategy is to develop strong membership loyalty by providing an attractive value proposition for club members and offering add-on products specifically targeted to meet their needs as reflected by our strong customer ~~renewal~~retention rates. Our ~~Each~~two ofmembership ~~our~~clubs ~~four~~(the ~~primary~~Good ~~membership~~Sam ~~clubs~~Club ~~provides~~and the Coast to Coast Club) provide our customers with tangible savings potential, the estimated value of which substantially ~~exceed~~exceeds the membership fee. On average, club members benefit by saving ~~over~~nearly ~~four~~six times the cost of their annual membership dues as a result of being able to purchase products and services at discounts made available through our clubs. We believe that the participation levels and ~~renewal~~retention rates of club members reflect the benefits derived from their membership. To continue to improve customer ~~renewal~~retention rates, we regularly evaluate member satisfaction and actively respond to changing member preferences through the enhancement or introduction of new membership benefits including products and services.

Cross-Sell Products and Services to Existing Customers. We proactively cross-sell our products and services across our customer base. For example, one of our core strategies is to offer our safety, finance and security products and services to our Good Sam Club members. We also use our customer database to cost-efficiently market Camping World products through catalogs and the Internet. At the same time, Camping World stores provide direct customer referrals and sales to our membership clubs, products and services. In addition, we use our publications to communicate with our core customer base and to promote our other business segments to existing club members and magazine readers. Our magazines contain relevant content as well as various forms of advertisements for our membership clubs, products and services.

Continue to Enhance Service Offerings at Camping World. We recently completed a multi-year capital investment of approximately $3138 million in 5162 new stores, a distribution center expansion and a systems upgrade, which not only expanded the Company’s nationwide Camping World footprint and increased our ability to market products and services, but also enhanced efficiency and lowered distribution costs. We are focused on improving profitability by continuing to shift focus to the higher margin service and repair business while expanding service offerings.

Continue to Enhance Digital Products. We believe that we have developed the most comprehensive source of RV news and information on vehicles, the industry, trends and campgrounds through our RV.net and related websites. Our digital “companion” websites provide our subscribers with additional relevant information tailored to their interests, while providing us with another profitable advertising channel. We currently operate ~~over~~more 50than 40 websites dedicated to the RV lifestyle including CampingWorld.com, a direct channel business which allows us to reach customers who are on the road or who do not live near a retail store.

Membership Services Segment

WeThe ~~operate~~Membership ~~primarily~~Services ~~four~~segment ~~membership~~funds ~~clubs:~~its ~~the~~working ~~Good~~capital ~~Sam~~needs ~~Club,~~through ~~President’s~~club ~~Club,~~dues ~~Coast~~and tocontract ~~Coast~~policy ~~Club~~fees ~~and~~which ~~Camp~~are ~~Club~~paid ~~USA,~~in ~~for RV owners~~advance, ~~campers~~ and ~~outdoor vacationers. In the fourth quarter of 2011, the Company entered into a~~ marketing ~~agreement~~fees towhich ~~transition~~we ~~the~~receive ~~operations~~monthly and ~~members~~quarterly offrom ~~Camp Club USA to a~~ third party ~~marketing organization~~providers. ~~The~~These ~~marketing~~prepaid ~~agreement~~membership ~~transfers~~fees ~~the~~are ~~individual~~classified ~~memberships~~as todeferred ~~the third party marketing organization upon the end of their current membership period~~revenues. ~~The~~Revenues, ~~Company~~segment ~~will~~profit/ ~~continue~~(loss) ~~to receive a marketing fee upon acquisition~~ and ~~renewal~~assets offor ~~Camp~~the ~~Club~~Membership ~~USA~~Services ~~members. Our~~segment ~~membership~~are ~~clubs~~detailed ~~provide~~in aNote ~~receptive~~15 ~~audience~~– toSegment ~~which~~Information wein ~~market our products and services. Effective January 1, 2012,~~ the ~~Good~~Notes ~~Sam~~to ~~Club and~~ the ~~President’s~~Consolidated ~~Club~~Financial ~~were combined to a single club called Good Sam Club~~Statements. ~~The combined club has approximately 1.3 million unique members.~~

~~The~~Membership following table sets forth the approximate number of members and annual membership fees as of December 31, 2011, and the approximate average annual renewal rate during the period of 2007 through 2011 for each club:Clubs

		Annual	Average
	Members as of	Membership	Annual Renewal
Membership Club	December 31, 2011 (1)	Fee (2)	Rate (3)
Good Sam Club	885,800	$20 - $25	58%
President’s Club	722,200	$15 - $20	71%
Coast to Coast Club	42,200	$90 - $140	65%
Camp Club USA	40,200	$40 - $50	41%

Our membership clubs provide a receptive audience to which we market our products and services. We operate primarily two membership clubs: the Good Sam Club and Coast to Coast Club for RV owners, campers and outdoor vacationers. Effective January 1, 2012, the Good Sam Club and the Camping World President’s Club were combined to a single club called Good Sam Club. This club merger has allowed the company to provide greater member benefits, less brand confusion, and lower renewal cost for its members. The combined club has approximately 1.3 million unique members. In the fourth quarter of 2011, the Company entered into a marketing agreement to transition the operations and members of Camp Club USA to a third party marketing organization. The marketing agreement transfers the individual memberships to the third party marketing organization upon the end of their current membership period. On March 1, 2012, Golf Card Club was sold to a third party.

The following table sets forth the approximate number of members and annual membership fees as of December 31, 2012, and the approximate average annual retention rate during the period of 2008 through 2012 for each club:

		Annual	Average
	Members as of	Membership	Annual Retention
Membership Club	December 31, 2012 (1)	Fee (2)	Rate (3)

Good Sam Club	1,271,100	$20 - $25	75%

Coast to Coast Club	40,600	$90 - $140	73%

(1) Includes multi-year and lifetime memberships.

(2) ~~For~~ Annual membership for a single member, subject to special discounts and promotions.

(3) Excludes members having lifetime memberships.

In addition to regular annual memberships, we also sell multi-year memberships. We believe that multi-year memberships provide several advantages, including the up-front receipt of dues in cash, reduced membership marketing costs and a stronger member commitment.

Good Sam Club

The Good Sam Club, founded in 1966, is a membership organization for RV owners. The ~~Good~~Camping ~~Sam~~World President’s Club iswas combined into the ~~largest~~Good RVSam ~~organization~~Club in ~~North America with approximately 885~~January,~~800~~ ~~members and over 1,300 local chapters as of December 31, 2011~~2012. The ~~average annual renewal rate for~~ Good Sam Club ~~members~~is ~~was approximately 58% during~~ the ~~period~~largest ~~2007~~RV ~~through~~organization ~~2011.~~in WeNorth ~~are~~America ~~focused~~with onapproximately ~~selling higher margin multi-year memberships which~~1, ~~among other advantages~~271,100 ~~reduces the cost of renewal membership. The average length of time for participation in the Good Sam Club is almost seven years with most club~~ members ~~purchasing~~and ~~annual~~over ~~memberships.~~1,300

~~Membership~~local ~~fees~~chapters ~~range~~as ~~from~~of ~~$20~~December ~~to $25~~31, ~~depending on the term and type (acquisition or renewal)~~2012. The ~~benefits~~average ofannual ~~club~~retention ~~membership~~rate ~~include:~~for ~~discounts~~Good ~~for~~Sam ~~overnight~~Club ~~stays~~members atwas approximately ~~1,670~~75% ~~participating~~during ~~RV parks and campgrounds; discounts on~~ the ~~purchase~~period of2008 ~~supplies~~through ~~and~~2012. We ~~accessories~~are ~~for~~focused ~~RVs~~on atselling ~~approximately~~higher ~~158~~margin RVmulti-year ~~service~~memberships ~~centers; gas~~which, ~~fuel~~among ~~and~~other ~~food discounts; a free annual subscription to Highways~~advantages, reduces the ~~club’s~~cost ~~regular~~of ~~news~~renewal ~~magazine; discounts on our other publications; trip routing and mail-forwarding; and access to products and services developed for club members~~membership. ~~Based~~Most ~~on typical usage patterns, we estimate that Good Sam Club~~ members ~~realize~~purchase ~~estimated~~ annual ~~savings from discounts of approximately $114~~memberships.

Annual membership fees range from $20 to $25, depending on the term and type (acquisition or renewal). The benefits of club membership include: discounts on all retail merchandise at Camping World stores of up to 30%, discounts for overnight stays at over 2,000 participating RV parks and campgrounds; discounts on fuel, propane, dumping stations and more at approximately 570 Pilot & Flying J Travel Centers in the U.S. and 62 in Canada; a free annual subscription to Highways, the club’s regular news magazine; savings of over 61% on the new 2013 Good Sam RV Travel & Campground Guide; discounts on our other publications; trip routing and mail-forwarding; access to online coupons from Camping World and our Smile & Save partners; a 50% discount on admission to Good Sam consumer events and shows, discounts on products and services developed for club members, and much more. Based on typical usage patterns, we estimate that Good Sam Club members realize estimated annual savings from discounts of approximately $143.

The Good Sam Club establishes quality standards for RV parks and campgrounds participating in its discount program. Campgrounds and parks participating in the Good Sam Club program benefit from increased occupancy and sales of camping related products. We believe we have established discount programs with a considerable portion of for-profit RV parks and campgrounds that meet our quality standards. We monitor the participating campgrounds and remove substandard facilities from our program to ensure that our brand image and reputation are not harmed.

In 1992, we began selling lifetime memberships for the Good Sam Club. In ~~2011~~2012, the average price for a lifetime membership was $~~326~~161 with ~~155~~170,700 lifetime members registered as of December 31, ~~2011~~2012. Based on actuarial tables, we expect the average length of a lifetime membership to be 18 years.

The following table lists the approximate number of club memberships, lifetime club memberships and RV parks and campgrounds at which discounts for members were available as of December 31 for the years ~~2007~~2008 through ~~2011~~2012:

	December 31,
	2011	2010	2009	2008	2007
	2012	2011	2010	2009	2008
Good Sam memberships (1)	~~885~~1,~~800~~271,100	~~866~~885,~~100~~800	~~930~~866,~~000~~100	~~952~~930,~~200~~000	1952,~~012,500~~200
Lifetime memberships	~~155~~170,700	~~163~~155,~~200~~700	~~157~~163,~~700~~200	~~150~~157,~~900~~700	~~146~~150,~~400~~900
RV parks and campgrounds offering discounts to Good Sam members	12,~~670~~020	1,~~600~~670	1,~~580~~600	1,~~520~~580	1,~~500~~520

(1) Includes multi-year and lifetime memberships, and includes former Camping World President’s Club members beginning in 2012.

~~President’s~~Coast to Coast Club

The ~~President’s~~Coast ~~Club~~to ~~program,~~Coast ~~which~~Club ~~was~~operates a long-established inreciprocal ~~1985,~~use isnetwork ~~the~~of ~~discount~~membership ~~buyer’s club for Camping World and the second largest~~ RV ~~club~~resorts in North America. We ~~(behind~~offer ~~only~~a ~~our~~series ~~Good Sam Club). As~~ of ~~December 31,~~membership ~~2011,~~benefits ~~the~~depending ~~President’s~~upon ~~Club~~pricing ~~had~~and ~~722,200~~program ~~members.~~type ~~The~~under ~~primary~~the ~~benefit~~Coast ~~offered~~ to ~~members~~Coast Club name. Members of the ~~President’s~~Coast to Coast Club isbelong to a ~~10%~~membership ~~discount~~RV onresort ~~all~~owned ~~retail~~and ~~merchandise~~operated atby ~~Camping~~parties ~~World~~unrelated ~~stores~~to us. ~~The~~Our ~~President’s~~club ~~Club~~members ~~offers~~may ususe athe ~~cost~~other ~~effective~~resorts ~~method~~in ofthe Coast ~~acquiring~~to ~~customers~~Coast ~~who~~Club ~~are~~network ~~likely~~on toa bereservation ~~receptive~~or tospace ~~our~~available ~~product~~basis and ~~service~~obtain ~~offerings.~~discounts Wefrom ~~use~~other ~~the~~non-private ~~significant~~campgrounds. As ~~amount~~ of ~~information~~December ~~gathered~~31, ~~when~~2012, athere ~~customer~~were ~~signs~~approximately up40,600 ~~for~~members ~~membership~~ in the ~~President’s~~Coast to Coast Club towhich ~~tailor~~had ~~product~~nationwide ~~offers~~access to ~~his~~approximately or210 ~~her~~membership ~~likely~~RV ~~needs~~resorts and ~~interests.~~a ~~Additionally,~~network weof ~~believe~~185 ~~that~~public ~~the~~campgrounds ~~President’s~~that ~~Club,~~participated ~~much~~in ~~like~~the aCoast ~~traditional~~to ~~customer~~Coast ~~loyalty~~Club ~~program,~~reciprocal ~~serves~~use toprograms. ~~bolster~~These ~~sales~~membership atresorts ~~our~~are ~~Camping~~designed ~~World~~primarily ~~stores. Effective~~for ~~January 1,~~RV ~~2012~~owners, ~~the~~but ~~Good~~typically ~~Sam~~provide ~~Club~~camping ~~and~~or ~~the~~lodging ~~President’s~~facilities, ~~Club~~comprised ~~were~~of ~~combined~~RVs, tocabins, apark ~~single~~models, ~~club~~and ~~called~~condominiums. The ~~Good~~membership ~~Sam Club.~~resorts

In addition to the 10% discount at Camping World stores, President’s Club members also received RV View, the club magazine, until Highways magazine became the official publication of both the Good Sam Club and the President’s Club in May 2011, and RV View was discontinued. President’s Club members also receive special mailings, including newsletters and flyers offering selected products and services at special prices. We are now using the Good Sam brand in the marketing of our products and services to these customers.

President’s Club memberships may initially be obtained for one, two or three years at a cost of $20, $40 or $50, respectively. We estimate that the average President’s Club member realizes annual savings of approximately $34. The average annual renewal rate for members of the President’s Club was 71% during the period from 2007 to 2011.

~~The~~provide ~~following~~an ~~table~~RV ~~sets~~site ~~forth~~with ~~the~~water, ~~approximate~~sewer ~~number~~and ofelectrical ~~President’s~~hook-ups ~~Club memberships~~ and ~~Camping~~recreational ~~World~~amenities, ~~stores~~such as ofswimming, ~~December 31~~tennis or fishing, or proximity to theme parks or other recreational activities. We have established quality criteria for resorts to join and remain in the ~~years~~Coast ~~2007~~to ~~through~~Coast ~~2011:~~Club networks.

	December 31,
	2011	2010	2009	2008	2007
President’s Club memberships (1)	722,200	745,600	755,300	718,500	738,500
Number of stores	82	79	78	78	77

For standard annual renewal dues from $99.95 for a single year membership to $599.95 for a multi-year membership, Coast to Coast Club members receive the following benefits: discounts for overnight stays at participating resorts and campgrounds; an annual subscription to Coast to Coast Magazine; the Coast to Coast Directory, which provides information on the participating resorts; discounts on our other publications; access to discount hotels and travel services; condo vacation rentals at discounted prices, dining, shopping, and recreation/entertainment discounts; and access to ancillary products and services developed for our club members.

We believe that resorts participating in the Coast to Coast Club networks view access to reciprocating member resorts as an incentive for their customers to join their resort. Because a majority of Coast to Coast Club members own RVs, access to participating resorts throughout North America can be an important complement to local resort membership. Based on typical use patterns, we estimate that Coast to Coast Club members realize estimated annual savings from these discounts of approximately $132. The average annual retention rate for members of the Coast to Coast Club after the initial one-year membership (which is generally paid by the member resort not the club member) was approximately 73% during the period 2008 through 2012.

The following table sets forth the approximate number of memberships in the Coast to Coast Club, the approximate number of private resorts participating in the reciprocal use program, and the approximate number of public resorts extending discounts to Coast to Coast Club members as of December 31 for the years 2008 through 2012:

	December 31,
	2012	2011	2010	2009	2008

Coast to Coast Club memberships (1)	40,600	42,200	46,400	53,700	60,200

Participating membership resorts	210	218	231	238	239
Participating public resorts	185	200	190	189	211

(1) Includes multi-year memberships.

~~Coast~~Membership ~~to Coast Club~~Ventures

~~The~~Our ~~Coast~~approximately to1.3 ~~Coast~~million ~~Club~~club ~~operates~~members provide a ~~long-established~~receptive ~~reciprocal~~audience ~~use~~to ~~network~~which ofwe ~~private~~market RVour ~~resorts~~products inand ~~North America~~services. We ~~offer~~promote aproducts ~~series~~and ofservices ~~membership~~which ~~benefits~~either ~~depending~~address ~~upon~~special ~~pricing~~needs ~~and~~arising ~~program~~from ~~type under~~ the ~~Coast~~activities ~~to Coast Club name. Members~~ of ~~the~~our ~~Coast~~club tomembers ~~Coast~~or ~~Club~~appeal ~~belong~~generally to apersons ~~private~~within RVthe ~~resort~~demographic ~~owned~~of ~~and~~our ~~operated by parties unrelated to us. Our~~ club members. The ~~may~~two ~~use~~products ~~the~~with ~~other resorts in~~ the ~~Coast~~largest toenrollment ~~Coast~~are ~~Club network on a reservation or space available basis and obtain discounts from other non-private campgrounds. As of December 31, 2011, there were approximately 42,200 members in~~ the ~~Coast~~roadside toassistance ~~Coast Club which had nationwide access to approximately 218 private RV resorts~~ and ~~a network of 200 public campgrounds that participated in~~ the ~~Coast~~vehicle toinsurance ~~Coast Club reciprocal use~~ programs. Most ~~These private resorts are designed primarily for RV owners, but typically provide camping or lodging facilities, comprised~~ of ~~RVs,~~our ~~cabins~~safety, ~~park~~finance ~~models,~~ and ~~condominiums.~~security ~~The~~products ~~private~~and ~~resorts~~services ~~provide~~are anprovided RVby ~~site~~third ~~with~~parties ~~water,~~who ~~sewer~~pay ~~and~~us ~~electrical~~a ~~hook-ups~~marketing ~~and recreational amenities~~fee, ~~such~~with asthe ~~swimming,~~exception ~~tennis~~of orroadside ~~fishing,~~assistance orwhere ~~proximity~~we toassume ~~theme parks or other recreational activities. We have established quality criteria for resorts to join and remain in~~ the ~~Coast~~risk toof ~~Coast~~incurred ~~Club networks~~claims.

~~For~~Roadside standard annual renewal dues from $89.95 for a single year membership to $559.80 for a multi-year membership, Coast to Coast Club members receive the following benefits: discounts for overnight stays at participating resorts and campgrounds; an annual subscription to Coast to Coast Magazine; the Coast to Coast Directory, which provides information on the participating resorts; discounts on our other publications; access to discount hotels and travel services; and access to ancillary products and services developed for our club members.Assistance

We ~~believe~~promote ~~that~~various ~~resorts~~Roadside ~~participating~~Assistance in(“RA”) ~~the~~products ~~Coast~~ to ~~Coast~~Good Sam Club ~~networks~~and ~~view~~Coast ~~access~~ to ~~reciprocating~~Coast ~~member~~Club members, ~~resorts~~ as anwell ~~incentive~~as ~~for their customers~~ to ~~join~~non-club ~~their resort~~members. The ~~Because~~RA aprograms ~~majority~~provide oftowing ~~Coast~~and toother ~~Coast~~roadside ~~Club~~services ~~members~~for ~~own~~subscribers ~~RVs,~~with ~~access~~annual todues ~~participating~~ranging ~~resorts~~from ~~throughout~~$59.95 ~~North America can be an important complement~~ to ~~local resort membership~~$159.95. We ~~Based~~developed onour ~~typical~~RA ~~use~~program ~~patterns,~~initially wefor ~~estimate~~Good ~~that~~Sam ~~Coast to Coast~~ Club members ~~realize~~in ~~estimated~~1984, ~~annual~~and, ~~savings~~as ~~from~~of ~~these~~December ~~discounts~~31, of2012, approximately ~~$117. The~~29% ~~average annual renewal rate for members~~ of ~~the~~Good ~~Coast~~Sam ~~to Coast~~ Club ~~after~~members ~~the~~were ~~initial~~enrolled. We ~~one-year~~currently ~~membership~~market ~~(which~~these isprograms ~~generally~~through ~~paid~~various bychannels ~~the~~including ~~member~~direct ~~resort~~mail, ~~not~~print ~~the~~advertising, ~~club~~online ~~member)~~and ~~was~~at ~~approximately~~Camping ~~65%~~World ~~during~~stores ~~the~~and ~~period~~RV ~~2007 through 2011~~dealerships.

The ~~following~~ table below sets forth the approximate ~~number~~total ofenrollment ~~memberships~~ in the ~~Coast~~various toRA ~~Coast~~programs ~~Club, the approximate number of private resorts participating in the reciprocal use program, and the approximate number of public resorts extending discounts to Coast to Coast Club members~~ as of December 31 for the years ~~2007~~2008 through ~~2011~~2012:

	December 31,
	2012	2011	2010	2009	2008
	2011	2010	2009	2008	2007
RA Enrollment	408,800	360,300	352,000	356,200	354,400
Coast to Coast Club memberships (1)	42,200	46,400	53,700	60,200	69,600
Participating private resorts	218	231	238	239	241
Participating public resorts	200	190	189	211	210

(1) Includes multi-year memberships.

Membership Products and Services

Our approximately 1.7 million club members provide a receptive audience to which we market our products and services. We promote products and services which either address special needs arising from the activities of our club members or appeal generally to persons within the demographic of our club members. The two products with the largest enrollment are the ERS and the vehicle insurance programs. Most of our safety, finance and security products and services are provided by third parties who pay us a marketing fee, with the exception of ERS where we assume the risk of incurred claims.

Emergency Road Service (ERS)

We promote various ERS products through our membership clubs, as well as to non-club members. The ERS programs provide towing and roadside assistance for subscribers with annual dues ranging from $69.95 to $139.95. We developed ERS initially for Good Sam Club members in 1984, and, as of December 31, 2011, approximately 31% of Good Sam Club members were enrolled in the Good Sam Club ERS program. We currently market these products through direct mail, advertising in publications, campground directories, space ads, the Internet, telemarketing and direct sales.

The table below sets forth the approximate total enrollment in the various ERS programs as of December 31 for the years 2007 through 2011:

		2011		2010		2009		2008		2007
ERS Enrollment		360,300		352,000		356,200		354,400		388,500

Vehicle Insurance Programs

We offer ~~two~~ vehicle insurance programs that offer cost-effective collision and liability insurance suitable to the demographic characteristics and vehicle usage patterns of our various club members. The Vehicle Insurance Program ~~(“VIP”)~~ is marketed primarily to the members of Good Sam Club and Coast to Coast Club. ~~The~~We ~~Motor~~have ~~Vehicle~~other ~~Program~~programs ~~(“MVP”)~~that isaddress ~~marketed~~the toneeds ~~President’s~~of ~~Club~~non-Good Sam members. As of December 31, ~~2011~~2012, approximately ~~152~~158,~~900~~100 members participated in the ~~two~~vehicle insurance programs, which represented aan 1211% ~~and 4%~~ penetration of the Good Sam Club ~~and the President’s Club, respectively~~. During the period ~~2007~~2008 to ~~2011~~2012, the average renewal rate of members participating in these insurance programs was approximately 91%. Our marketing fee revenue is based on the amount of written premiums and the insurance provider assumes all claim risks.

8The following table sets forth the total number of policies in force as of December 31 for the years 2008 to 2012, and the dollar amount of written premiums paid to insurance providers and the marketing fees generated for such periods:

The following table sets forth the total number of policies in force as of December 31 for the years 2007 to 2011, and the dollar amount of written premiums paid to insurance providers and the marketing fees generated for such periods:

	2012		2011		2010		2009		2008

Total policies in force	158,100		152,900		161,600		168,200		184,100

Written premiums paid to insurance providers (in millions)	$	168	$	173	$	187	$	197	$	218

Marketing fees (in millions)	$	15	$	15	$	16	$	17	$	18

	2011	2010	2009	2008	2007
Total policies in force	152,900	161,600	168,200	184,100	201,700
Written premiums paid to insurance providers (in millions)	$ 173	$ 187	$ 197	$ 218	$ 243
Marketing fees (in millions)	$ 15	$ 16	$ 17	$ 18	$ 20

Extended Service Plan

Our Extended Service Plan (“ESP”), a private label extended vehicle warranty program for RVs, had total net revenue for ~~2011~~2012 of $4046.46 million, increasing 1215% over ~~2010~~2011. The program had approximately 4951,~~300~~200 policies in force as of December 31, ~~2011~~2012. Sales of new policies were derived from direct mail marketing, print ads in our magazines, Internet and e-mail solicitations, and promotions in Camping World stores. ~~Policy~~ESP policy renewals represented 6358% of the total revenue ~~from ESP~~ for ~~2011~~2012.

Other products and services marketed to club members include vehicle financing, credit cards, supplemental health and life insurance, and financial services. Most of these services are provided to club members by third parties who pay us a marketing fee.

Retail Segment

~~Stores~~The Retail segment funds its working capital needs through its credit facility (see Note 6 - Long-term Debt in the Consolidated Notes to the Financial Statements) and its retail operations. Camping World is required to carry significant amounts of inventory to meet the requirements of its customers through its retail, internet and mail order channels. Revenues, segment profit/ (loss) and assets for the Retail segment are detailed in Note 15 – Segment Information in the Notes to the Consolidated Financial Statements.

Camping World is a national specialty retailer of merchandise and services for RV owners. We currently have 82 Camping World retail locations, which are located in 32 states. These stores accounted for approximately 85% of total revenues from the Retail segment for 2011, and the remaining 15% was derived from catalog and Internet sales.Stores

~~In the RV accessory industry, we believe that~~ Camping World ~~has~~is a ~~high~~national ~~level~~specialty ofretailer ~~positive brand recognition, an effective triple channel distribution strategy (stores, catalogs, and online), and a commitment to offer a broad selection~~ of ~~specialized~~merchandise ~~RV products~~ and services atfor ~~competitive~~RV ~~prices~~owners. ~~combined~~We ~~with~~currently ~~technical~~operate ~~assistance~~93 ~~and on-site installation.~~ Camping World’s ~~stores~~retail ~~offer approximately 9~~locations,~~200~~ ~~products, of~~ which ~~we estimate approximately 70%~~ are ~~not~~located ~~regularly available~~ in ~~general~~32 ~~merchandise stores~~states. These ~~In addition, general merchandise~~ stores doaccounted ~~not provide installation or repair services~~ for RV products, which are available at Camping World’s stores. Products sold by Camping World include specialty-sized refrigerators, housewares and other appliances, bedding and furniture, generators and hydraulic leveling systems, awnings, chairs, ladders, cleaning and maintenance products, bicycles, hitch-towing, sanitation products, automotive electronics and lifestyle products. Camping World’s stores are designed to provide one-stop shopping by combining broad product selection, technical assistance and on-site installation and repair services. We strategically locate Camping World stores in areas where many RV owners live, along major Interstates, and/or in proximity to destinations frequented by RV users.

Camping World sources its products from approximately 1,100 vendors. Camping World attends regional, national and international trade shows to determine what products it will offer. The purchasing activities of Camping World are focused on RV parts and accessories, electronics, housewares, hardware, automotive, crafts, clothing, home furnishings, gifts, camping and sporting goods. Camping World uses an automated “plan-o-gram” system to develop and maintain merchandising plans unique to each store and an inventory replenishment system for its operations to improve in stock rates on key items. Camping World believes that the volume of merchandise it purchases from domestic and international suppliers, and its ability to buy direct from manufacturers, enables it to obtain merchandise at costs which compare favorably to local RV dealers and retailers. Camping World does not enter into material long-term contracts or commitments with its vendors.8

9approximately 83% of total revenues from the Retail segment for 2012, and the remaining 17% of revenue was derived from catalog and Internet sales.

~~The~~In ~~retail~~the ~~stores~~RV ~~are~~accessory ~~periodically~~industry, ~~reset~~we tobelieve ~~enhance~~that ~~the~~Camping ~~customers’~~World ~~shopping~~has ~~experience~~a ashigh ~~well~~level asof positive brand recognition, an effective triple channel distribution strategy (stores, catalogs, and online), and a commitment to ~~maximize~~offer ~~merchandise~~a ~~offerings.~~broad ~~New~~selection of specialized RV products and services ~~are~~at ~~introduced~~competitive inprices ~~order~~combined towith ~~keep~~technical ~~pace~~assistance ~~with~~and ~~the~~on-site ~~advances~~installation. Camping World’s stores offer approximately 9,200 products, of ~~the~~which RVwe ~~industry~~estimate ~~and~~approximately to70% ~~address~~are ~~our~~not ~~customers’~~regularly ~~needs~~available in general merchandise stores. In ~~Customers~~addition, ~~take~~general ~~advantage~~merchandise ofstores ~~the~~do ~~state-of-the~~not ~~art~~provide ~~performance~~installation ~~centers~~or ~~staffed~~repair ~~with~~services ~~expert~~for RV products, inwhich are available at Camping World’s stores. Products sold by Camping World include specialty-~~house~~sized ~~trained~~refrigerators, RVhousewares ~~technical~~and ~~consultants~~other appliances, bedding and ~~equipped~~furniture, ~~with~~generators ~~merchandise~~and ~~demonstrations~~hydraulic toleveling ~~assist~~systems, inawnings, ~~educating~~chairs, ~~customers~~ladders, ~~about~~cleaning RVand ~~performance~~maintenance products., ~~Finally~~bicycles, ~~store~~hitch ~~dress~~towing, ~~promotional~~sanitation ~~signage~~products, automotive electronics and ~~directional~~lifestyle ~~signage~~products. Camping ~~are~~World’s ~~periodically~~stores ~~refreshed~~are designed to ~~further~~provide ~~enhance~~one-stop ~~our~~shopping ~~customers’~~by ~~shopping~~combining ~~experience~~broad atproduct selection, technical assistance and on-site installation and repair services. We strategically locate Camping World’s stores in areas where many RV owners live, along major Interstates, and/or in proximity to destinations frequented by RV users.

Camping World sources its products from approximately 1,100 vendors. Camping World attends regional, national and international trade shows to determine what products will be offered. The purchasing activities of Camping World are focused on RV parts and accessories, electronics, housewares, hardware, automotive, crafts, clothing, home furnishings, gifts, camping and sporting goods. Camping World uses an automated “plan-o-gram” system to develop and maintain merchandising plans unique to each store and an inventory replenishment system for its operations to improve in-stock rates on key items. Camping World believes that the volume of merchandise it purchases from domestic and international suppliers, and its ability to buy direct from manufacturers, enables it to obtain merchandise at costs which compare favorably to local RV dealers and retailers. Camping World does not enter into material long-term contracts or commitments with its vendors.

The retail stores are periodically refreshed to enhance the customers’ shopping experience as well as to maximize merchandise offerings. New products and services are introduced in order to keep pace with the advances of the RV industry and to address our customers’ needs. Customers take advantage of the state-of-the art performance centers staffed with expert, in-house trained, RV technical consultants which are equipped with merchandise demonstrations to assist in educating customers about RV performance products. Finally, store dress, promotional signage and directional signage are periodically refreshed to further enhance our customers’ shopping experience at Camping World’s stores.

Camping World’s stores generally range in size from approximately 10,000 to 64,000 square feet. Approximately 40% of each store is devoted to a retail sales floor, a customer service area, and a technical information counter; 40% is comprised of an installation facility, which contains 4 to 16 drive-through installation bays; and 20% is allocated to office and warehouse space. Large parking areas provide sufficient space to facilitate maneuvering of RVs. Camping World maintains toll-free telephone numbers for customers to schedule installation and repair appointments. All stores are open seven days a week.

Camping World has developed dealer partnerships across North America through which Camping World has established ~~Camping~~retail ~~World~~ stores alongside or within existing RV dealerships. This marketing strategy has ~~provided~~provides an expanded number of customers with access to the vast array of products and services that we offer and ~~generated~~generates traffic for our dealer partners. Camping World has established 6076 stores alongside or within RV dealerships. Of the Camping World stores that are located alongside or within RV dealerships, 4968 are located within dealerships indirectly owned or operated by FreedomRoads. FreedomRoads is indirectly owned and controlled by Stephen Adams, our Chairman.

Mail Order Operations and Internet

Camping World initiated its catalog operations in 1967. Camping World currently has a proprietary mailing list of approximately 2.54 million RV owners, all of whom have made a purchase or requested a catalog from Camping World within the prior 60 months. Camping World maintains a database of these names, which includes information such as order frequency, size of order, date of most recent order and type of merchandise purchased. Camping World analyzes its database to determine which customers are most likely to order from Camping World’s catalogs. As a result, Camping World is able to target customers for catalog mailings more effectively than direct marketers of catalogs offering general merchandise. Camping World continually expands its proprietary mailing list through in-store subscriptions and requests for catalogs in response to advertisements in regional publications directed at RV owners. ~~In addition, Camping World rents mailing lists of RV owners from third parties.~~

During ~~2011~~2012, Camping World distributed 54.61 million high-quality, full-color catalogs, 43.84 million of which were mailed in six separate mailings, and the remaining ~~800~~660,000 catalogs were distributed in stores, at campgrounds and other RV locations, and as package inserts. During the same period, Camping World processed approximately ~~320~~430,000 catalog orders with an average net order amount of $~~111~~118, excluding postage and handling charges. Camping World distributed six high-quality, full-color catalogs during ~~2011~~2012; the Master Catalog, plus the Early Spring, May, Summer, Late Summer and Fall catalogs.

Member Services - Media Segment

The Membership Services – Media segment funds its working capital needs through upfront fees paid for annual subscriptions and advertising revenues, in addition to consumer show exhibitor fee revenues and sponsorships paid in advance for their respective annual shows. Revenues, segment profit/ (loss) and assets for the Retail segment are detailed in Note 15 – Segment Information in the Notes to the Consolidated Financial Statements.

We produce and distribute a variety of publications for select markets in the recreation and leisure industry, including general circulation periodicals, club magazines, directories, and RV and powersports industry trade magazines. Revenues are recognized from the sale of advertising, subscriptions and direct sales of some of the publications. We believe that the focused audience of each publication is an important factor in attracting advertisers.

The following chart sets forth the circulation and frequency of our publications:

	Average Circulation
	for the Year Ended	~~Number of Issues~~	Number of Issues
	December 31,	~~Published~~	Published
Publication	~~2011~~2012	~~Annually~~	Annually
PAID CIRCULATION MAGAZINES (1)
Camping Life	74,104	8
Camping Life (2)	78,688		3
MotorHome	~~125~~127,~~455~~043	12	12
Powerboat	10,545	6
Rider	133,989		12
Rider	135,829	12
SnowGoer	59,135		7
SnowGoer	59,948	7
Trailer Life	202,168		12
Trailer Boats	25,477	9
CONTROLLED CIRCULATION- Business (3)
Trailer Life	211,136	12
Boating Industry	23,096		11
CONTROLLED CIRCULATION- Business (2)
Campground Management (4)	12,939		8
Boating Industry	23,585	11
PowerSports Business	12,098		14
Campground Management	13,071	12
PowerSports Business Market Data Book	13,700		1
PowerSports Business	12,070	14
FREE DISTRIBUTION (5)
PowerSports Business Dealer Directory	12,100	1
Thunder Press- North	24,905		12
PowerSports Business Market Data Book	12,100	1
Thunder Press- South	17,789		12
RV Business	7,391	6
Thunder Press- West	28,463		12
CONTROLLED CIRCULATION- Consumer (3)
ANNUALS
ATV Magazine	132,177	6
Good Sam RV Travel Guide & Campground Directory (1)	143,826		1
FREE DISTRIBUTION (4)
Trailer Life’s RV Buyers Guide	53,856		1
Thunder Press- North	23,230	12
Towing Guides	332,680		1
Thunder Press- South	19,610	12
Woodall’s Tenting Directory (6)	83,815		1
Thunder Press- West	29,909	12
CLUB MAGAZINES (7)
ANNUALS (1)
Coast to Coast Magazine	45,494		4
Trailer Life RV Parks and Campgrounds Directory	158,071	1
Highways	1,230,062		5
Trailer Life’s RV Buyers Guide	60,904	1
Towing Guides	354,505	1
Woodall’s Campground Directory	460,181	1
Woodall’s Tenting Directory	89,649	1
CLUB MAGAZINES (5)
Camp Club USA Directory	51,865	1
Coast to Coast Magazine	54,978	4
Golf Traveler (6)	23,167	1
Highways (7)	1,018,947	7
RV View (7)	775,686	5

(1) Paid circulation~~, may include supplemental qualified controlled circulation.~~

(2) ~~Trade~~ ~~publication~~Merged ~~distributed~~into toTrailer ~~industry-specific~~Life ~~groups.~~Magazine in June 2012

(3) ~~Qualified~~ ~~and~~Trade ~~limited~~publication ~~paid~~distributed ~~circulation~~to industry-specific groups.

(4) ~~Includes~~ ~~limited~~Magazine ~~paid~~was ~~circulation~~sold in 2012. The last issue published by the Company was in August, 2012.

(5) ~~Limited~~ toIncludes ~~club~~limited ~~members and promotional copies~~paid. ~~The magazine is included with the membership.~~

(6) ~~Only~~ ~~one~~Discontinued ~~magazine~~after is2012 ~~issued when two members are from the same household~~issue.

(7) ~~Highways~~ ~~magazine~~Limited ~~became~~to ~~the~~club ~~official~~members ~~publication~~and ofpromotional ~~both~~copies. ~~Good~~The ~~Sam~~price ~~Club~~is ~~and~~included ~~President’s Club~~ in ~~May 2011,~~the ~~and~~membership ~~RV View was discontinued~~fee.

Paid Circulation Magazines

Camping Life appeals to family-style campers and other outdoor enthusiasts with articles about destinations, products and activities to enhance their outdoor lifestyles. This publication was merged into Trailer Life in June 2012.

MotorHome is a monthly periodical for owners and prospective buyers of motorhomes which has been published since 1968 and features articles on subjects such as product tests, travel and tourist attractions.

Powerboat is a leading performance boating magazine which was founded in 1968 and acquired by us in 2005. This magazine focuses on performance boats, engines, as well as race coverage. The magazine is well known for its “Performance Trials,” regarded as one of the industry’s most comprehensive and authoritative testing programs while boasting some of the marine industry’s finest photography and writing. Powerboat was sold May, 2011.

Rider is a monthly magazine for motorcycle touring enthusiasts and has been published since 1974. Each issue focuses on motorcycles, personalities, technical subjects, travel notes and other features of interest to this recreational affinity group.

SnowGoer is designed for highly active snowmobiling participants and provides detailed equipment and product critiques, and maintenance tips.

Trailer Boats magazine, the country’s only trailer boating magazine, is dedicated to the hard-core enthusiast of trailerable boats, marine propulsion, accessory installations and use, maintenance and repair, tow vehicles, boat trailering, seamanship, water sports and cruising. Trailer Boats was sold in May, 2011.

Trailer Life, initially published in 1941, is the leading consumer magazine for the RV industry, featuring articles on subjects including product tests, travel and tourist attractions.

Controlled Circulation Magazines- Business

Boating Industry is the leading source of news and information for dealers, manufacturers, aftermarket vendors and other professionals in the marine industries through its magazine and daily web site.

Campground Management is the leading trade magazine for the campground industry. This publication was sold June, 2012.

PowerSports Business is an industry trade magazine, introduced in January 1998, which combines the previously issued Snowmobile Business and Watercraft Business with a motorcycle and ATV business section. Distribution is to dealers servicing these industries, which in numerous cases have combined operations to service more than one of these segments.

PowerSports Business Dealer Directory is a supplier directory for each of the ATV, snowmobile and watercraft markets. This directory features hundreds of manufacturers and suppliers of parts, services, apparel and much more, complete with detailed company information.

PowerSports Business Market Data Book is an annual publication that provides industry sales trends for power sports manufacturers and dealers; dealer customer service and performance data; manufacturer stock performance updates; industry supplier information; and various industry research projects.

RV Business is the leading trade magazine covering industry news and trends for RV dealers, manufacturers, suppliers, associations and others. RV Business was sold March, 2011.

Controlled Circulation Magazines- Consumer

ATV Magazine’s first issue was published in October 1995. The publication is designed to reach large numbers of active ATV owners with comprehensive product information during the peak periods when equipment is purchased. ATV Magazine was sold in October, 2011.

Free Distribution Publications

Thunder Press newspapers are published monthly in three separate editions to reach the country’s motorcycling public and are available primarily through motorcycle dealers. This tell-it-like-it-is magazine is designed for the ultra-active motorcycle enthusiast who feels passionate about the lifestyle.

Annual Publications

~~Trailer~~Good ~~Life~~Sam RV ~~Parks~~Travel ~~and~~Guide ~~Campgrounds~~& ~~Directory,~~Campground ~~initially published in 1972,~~ Directory is an annually updated ~~directory~~camping and RVing resource guide which provides comprehensive information on ~~approximately~~over 1214,000 public and private campgrounds, ~~approximately~~Camping ~~1,000~~World ~~RV service centers~~locations, and approximately ~~1,000~~750 ~~tourist~~select ~~attractions~~travel service and tourism locations in North America. It is the official directory of the Good Sam Club and is the premier source to find all the Good Sam discount locations. ~~This~~ The directory is sold primarily to Good Sam ~~Club~~ members and RV enthusiasts via ~~direct~~Camping ~~mail~~World retail stores, e-commerce, bookstores, and at RV dealerships, ~~RV Parks~~ and ~~in bookstores~~campgrounds.

Trailer Life’s RV Buyers Guide, issued annually, features more than ~~400~~500 listings with photos, floorplans and specifications on new RVs including travel trailers, fifth-wheel trailers, folding camping trailers, motorhomes and truck campers. The publication is sold aton newsstands and by mail order ~~from~~through magazine print and online advertisements. It is also distributed at all of the Company events and RV shows.

The Towing Guides are booklets dedicated to meeting the needs of all camping and boating enthusiasts that are towing a trailer. These booklets serve as a step-by-step tutorial for newcomers and a refresher course for trailer-towing veterans intended to ensure that maximum enjoyment of their trailer by making informed decisions.

Woodall’s Campground Directory, initially published in 1948, is an annual consumer directory offered in both national and regional editions. This directory is primarily distributed through book stores.

Woodall’s Tenting Directory is an annual directory distributed primarily through newsstands, which provides information on both government and privately-owned campgrounds and the outdoor activities and attractions that are available near them.

Club or Trade Magazines and Books

Each of our membership clubs has its own publication which provides information on club activities and events, feature stories and other articles. We publish Highways for the Good Sam Club, and Coast to Coast Magazine for the Coast to Coast Club~~, The Golf Traveler for the Golf Card Club, the Camp Club USA Directory for Camp Club USA members, and RV View for the President’s Club~~. ~~We also periodically publish books targeted to our club membership which address the RV lifestyle.~~

Consumer Shows

We also operate 2926 consumer outdoor recreation shows at 23 venues in 19 cities, which are primarily RV, boat and sport shows. These shows provide us with the opportunity to reach new customers and interact with them on a face-to-face basis. Revenues are recognized primarily from the sale of exhibitor booth space and admission fees. The total audience of RV, boating, powersports and outdoor recreation enthusiasts who attend these shows ~~exceeds~~is approximately 250,000 annually.

Guest Services Campground Guides

We produced local campground guides distributed free of charge to campgrounds across the U.S., with limited distribution in Canada. These guides include paid advertisements for local attractions, restaurants and services and also include a site map of the campground. The guest services campground guides were sold in June, 2011.

Marketing

We market our club memberships and related products and services through direct mail, websites, e-mail, inserts, ride-alongs, space advertisements, promotional events, point of sale, member-get-a-member campaigns, and telemarketing. Direct response marketing efforts account for approximately 4855% of new enrollments with the remaining 5245% derived from other sources. ~~We use a variety of commercially available mailing lists of RV owners along with our proprietary database in our direct mail efforts.~~ Currently, ~~the~~our most widely used list ~~databases~~database ~~are~~is ~~provided~~our byinternal ~~three commercial list compilers, and direct response lists are prepared from RV industry participants, RV consumer surveys, and~~ proprietary ~~in-house lists~~database.

Our ~~publications~~Membership Services- Media segment solicits advertisements through an internal sales force and by paying commissions to advertising agencies and independent contractors who place advertisements. We believe that the targeted audience for each of our publications is an important factor in attracting advertisers, which include manufacturers of RVs and RV-related products, campground operators and large national RV dealerships as well as manufacturers of powersports vehicles and accessories. Many advertisers are repeat customers with whom we have long-standing relationships.

We market our retail products through the strategic location of our Camping World stores in high traffic RV areas, in-store promotions, our websites, mail order catalogs, direct mail retail flyers, advertisements in national and regional industry publications, vendor co-op advertising programs, promotional events, ~~the President’s Club~~ direct mailings and personal solicitations and referrals. Camping World’s principal marketing strategy is to capitalize on its broad name recognition among RV owners.

The Internet ishas ~~proving~~proved to be a significant, low-cost source for new club members, subscriptions and other ancillary product sales. We maintain ~~over~~more 50than 40 websites, which are accessible through http://www.rv.net, and are experiencing significant growth. Online sales increased 2286.72% to $5196.7 3 million for ~~2011~~2012 compared to ~~2010~~2011.

Operations

Our customer service operations are located in Denver, Colorado and Bowling Green, Kentucky. The primary focus of these groups is to improve our customers’ experience with our products and services and to maintain customer satisfaction with our company. On average, these member service operations process approximately 43,~~400~~800 telephone calls daily. Approximately 4175% of the calls into these centers originate from our catalog mailings or relate to membership acquisition and membership renewals. Customers can contact our customer service operations using toll-free numbers that we provide in our mailings.

Camping World’s catalog and Internet operations, located at its headquarters in Bowling Green, Kentucky, are supported by the customer contact center in the same location. Orders are usually processed and shipped within 24 hours of receipt.

Fulfillment operations involve the processing of orders and checks principally received by mail. Certain fulfillment operations are performed by third parties. Our publications operations develop the layout for publications and outsource printing to third parties.

Information Support Services

We utilize integrated computer systems to support our membership club and publishing operations. A database containing all customer activity across our various businesses and programs has been integrated into our websites and call centers. Comprehensive information on each member, including a profile of the purchasing activities of members, is available to customer service representatives when responding to member requests and when marketing our products and services. We employ publishing software for publication makeup and content and for advertising to support our publications operations. A wide-area network facilitates communication within and between our offices. We also utilize information technology, including list segmentation and merge and purge programs, to select prospects for direct mail solicitations and other direct marketing efforts.

Camping World’s management information systems and electronic data processing systems consist of an extensive range of retail, mail order, financial and merchandising systems, including purchasing, inventory distribution and logistics, sales reporting, accounts payable and merchandise management. Camping World’s management information system includes point-of-sale registers that are equipped with bar code readers in each store. These registers are polled nightly by a central computer. With this point-of-sale information and the information from Camping World’s on-line distribution centers, Camping World compiles comprehensive data, including detailed sales volume and inventory information by product, merchandise transfers and receipts, special orders, supply orders and returns of product purchases to vendors. In conjunction with its nightly polling, Camping World’s central computer sends price changes to registers at the point of sale. The registers capture ~~President’s~~Good ~~Club~~Sam member numbers and associated sales and references to specific promotional campaigns. Management monitors the performance of each store and mail order operation to evaluate inventory levels, determine markdowns and analyze gross profit margins by product.

Regulation

Our operations are subject to varying degrees of federal, state and local regulation. Specifically, our outbound telemarketing, direct mail, and ~~ERS~~Roadside Assistance, as well as certain safety, finance and security products and services provided by third parties, including insurance, RV financing, and extended warranty programs, are currently subject to certain regulation, and may be subject to increased regulation in the future. We do not believe that such federal, state and local regulations currently have a material impact on our operations. However, new regulatory efforts impacting our operations may be proposed from time to time at the federal, state and local level. There can be no assurance that such regulatory efforts will not have a material adverse effect on our ability to operate our businesses or on our results of operations.

Competition

We face strong competition in all of our business segments. Our competitors vary in size and the breath of their product offerings. Many of our competitors have a larger of number of financial, distribution, marketing and other resources, and some of them have greater market presence and name recognition. We compete directly or indirectly with the following types of companies:

· other specialty retailers that compete with us across a significant portion of our merchandising categories through retail store or direct businesses, such as individual RV dealerships, RV Supply Warehouse and JC Whitney;

· mass merchandisers, warehouse clubs, discount stores and department stores, such as Wal-Mart;

· direct marketer competitors through all media, including the Internet; and

· major national insurance companies and providers of roadside assistance such as AAA.

15By offering significant membership benefits at a reasonable cost and actively marketing to club members, we believe that we have been able to maintain a loyal following for our membership organizations as evidenced by the retention rates of our membership clubs. We also believe that we are able to use the large volume of purchases by our club members to secure attractive pricing for the products and services marketed by us, which also helps to maintain our loyal customer base.

By offering significant membership benefits at a reasonable cost and actively marketing to club members, we believe that we have been able to maintain a loyal following for our membership organizations as evidenced by the renewal rates of our membership clubs. We also believe that we are able to use the large volume of purchases by our club members to secure attractive pricing for the products and services marketed by us, which also helps to maintain our loyal customer base.

Seasonality

Our cash flow is highest in the summer months due to the seasonal nature of the retail segment, membership renewals and advertising prepayments for the annual directories and guides.

Trademarks and Copyrights

We own a variety of registered trademarks and service marks for the names of our clubs, magazines and other publications. For the Membership Services segment, a partial list of our trademarks and trademark renewal dates include: (1) Good Sam Club (August 2013), (2) Coast to Coast (April 2020), and (3) Good Sam RV Emergency Road Service (September 2022). For the Retail segment, our primary trademark is Camping World, which has a renewal date of February 2022. For the Membership Services – Media segment, a partial list of our trademarks and trademark renewal dates include: (1) Trailer Life Campgrounds, RV Parks and Services Directory (June 2016), (2) Trailer Life (July 2018), and Motorhome (September 2018). We also own the copyrights to certain articles in our publications. We believe that our ~~trademark~~trademarks and copyrights have significant value and are important to our marketing efforts.

Employees

As of December 31, ~~2011~~2012, we had 1,~~477~~621 full-time and 7383 part-time or seasonal employees, consisting of 119 executives, 1,~~095~~193 employees in retail operations, ~~297~~355 employees in administrative and club operations, 98 employees in publishing and advertising sales, 65 employees in resort services and 4344 employees in marketing. No employees are covered by a collective bargaining agreement. We believe that our employee relations are good.

Available Information

Our website, Campingworld.com, includes free access to our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to these reports as soon as reasonably practicable after we voluntarily file such material with, or furnish it to, the SEC.

ITEM 1A: RISK FACTORS

The risks described below are not the only risks we face. Any of the following risks could materially adversely affect our business, financial condition or results of operations. Additional risks and uncertainties not currently known to us, or that we currently deem to be immaterial, may also materially adversely affect our business operations.

Risks Related to Our Business

We depend on our ability to attract and retain active members in our membership clubs.

Our future success depends in large part upon continued demand for our membership club programs by consumers. Any number of factors could affect the frequency with which consumers participate in our programs or whether they enroll in a membership club at all. These factors include (1) ~~consumer~~ preferences, (2) the frequency with which members participate in club activities, (3) general economic conditions, (4) weather conditions, (5) the availability of alternative discount programs in the region in which consumers live and work, (6) significant increases in gasoline prices, and (7) the disposable income of consumers available for discretionary expenditures. Any significant decline in usage of our club programs or increase in program cancellations, without a corresponding increase in new member enrollments, could have a material adverse effect on our business.consumer

preferences, (2) the frequency with which members participate in club activities, (3) general economic conditions, (4) weather conditions, (5) the availability of alternative discount programs in the region in which consumers live and work, (6) significant increases in gasoline prices, and (7) the disposable income of consumers available for discretionary expenditures. Any significant decline in usage of our club programs or increase in program cancellations, without a corresponding increase in new member enrollments, could have a material adverse effect on our business.

We depend on our relationships with third party providers of products and services and a disruption of these relationships or of these providers’ operations could have an adverse effect on our business and results of operations.

Our business depends in part on developing and maintaining productive relationships with third party providers of products and services that we market to our customers. Many factors outside our control may harm these relationships. For example, financial difficulties that some of our providers may face adversely affect our marketing program with them and could result in their inability to service, manufacture or deliver products to us in a timely manner. Camping World sources its products from approximately 1,100 domestic and international vendors. If any of our key vendors or manufacturers fail to supply us with merchandise, we may not be able to meet the demands of our customers and our sales could decline. The loss of any key vendor or manufacturer for any reason could limit our ability to offer products that our customers want to purchase. A disruption of our relationships with our marketing partners or a disruption in our marketing partners’ operations could have a material adverse effect on our business and results of operations.

adversely affect our marketing program with them and could result in their inability to service, manufacture or deliver products to us in a timely manner. Camping World sources its products from approximately 1,100 domestic and international vendors. If any of our key vendors or manufacturers fail to supply us with merchandise, we may not be able to meet the demands of our customers and our sales could decline. The loss of any key vendor or manufacturer for any reason could limit our ability to offer products that our customers want to purchase. A disruption of our relationships with our marketing partners or a disruption in our marketing partners’ operations could have a material adverse effect on our business and results of operations.

Our business could be adversely affected by deteriorating general economic conditions or any decrease in disposable income spent on leisure merchandise and activities.

In general, our sales from our membership clubs, retail and catalog operations and publications result from discretionary spending by our consumers, and discretionary spending is particularly vulnerable to declines in disposable income and actual or perceived unfavorable economic conditions. Our business, therefore, is sensitive to general economic conditions affecting the willingness of consumers to purchase club memberships and related products and services and of advertisers to place advertisements in our publications. Economic ~~The economic~~ slowdown ~~has~~may negatively ~~impacted~~impact consumer confidence, consumer spending and, consequently, our business. For ~~Our~~example, our 2009 total revenue experienced a 10.3% drop from 2008, and our 2010 total revenue experienced a 0.2% drop from 2009 primarily as a result of the recession. In particular, during the gasoline shortages and resulting price increases in 1973, 1980 and 1990, there was a reduction in advertising revenues ~~for~~in our publications.

In addition, the success of the membership club portion of our business depends on our members’ use of certain RV sites and/or ~~golf courses or~~ the purchase of goods through participating merchants. If the economy slows, our members may perceive that they have less disposable income to permit them to pursue leisure activities. As a consequence, they may travel less frequently, spend less when they travel and use the benefits of their club memberships less often, if at all. Any decline in program usage would hurt our business. Furthermore, the products and services we market compete with similar products, services, publications and retail businesses offered by other providers. Increased competition from these and other sources could require us to respond to competitive pressures by establishing pricing, marketing and other programs or seeking out additional strategic alliances or acquisitions that may be less favorable to us than we could otherwise establish or obtain. In addition, ~~the~~declines ~~current decline~~ in the national economy could cause some of the merchants who participate in our programs to go out of business. It is likely that, should the number of merchants entering bankruptcy rise, the number of uncollectible accounts would also rise. This would have an adverse effect on our business and financial results.

We are subject to varying degrees of federal, state and local regulations which may affect our operations and costs of doing business.

Our operations are subject to varying degrees of federal, state and local regulation, including our outbound telemarketing, direct mail, ERS program, and insurance activities. New regulatory efforts may be proposed from time to time that have an adverse effect on our ability to operate our businesses or our results of operations. For example, a principal source of leads for our direct response marketing efforts was new vehicle registrations provided by motor vehicle departments in various states. Currently, all states restrict access to motor vehicle registration information.

outbound telemarketing, direct mail, roadside assistance programs, and insurance activities. New regulatory efforts may be proposed from time to time that have an adverse effect on our ability to operate our businesses or our results of operations. For example, a principal source of leads for our direct response marketing efforts was new vehicle registrations provided by motor vehicle departments in various states. Currently, all states restrict access to motor vehicle registration information.

Changes in laws or regulations relating to the sourcing or reselling of products, Internet and e-commerce transactions, environmental protection and health and safety and federal or state wage requirements could increase our costs of compliance and adversely impact our ability to achieve anticipated operating results.

Increases in paper costs, postage costs and shipping costs may have an adverse impact on our future financial results.

The price of paper is a significant expense relating to our publications and direct mail solicitations. Postage for publication distribution and direct mail solicitations is also a significant expense. In addition, shipping costs are a significant expense for our business. In ~~2011~~2012, we spent $2526.76 million on paper, postage and shipping costs, which was approximately 98.5% of total costs applicable to revenues. Paper, postage and shipping costs have increased in the past and may be expected to increase in the future. Such increases could have an adverse effect on our business if we are unable to pass them on to our customers.

We face competition in the markets in which we operate, including competition from companies with significantly greater resources than ours. If we are unable to compete effectively with these companies, our business, financial condition and results of operations could be harmed.

We face strong competition in all of our business segments. Our competitors vary in size and the breadth of their product offerings. Many of our competitors have a larger number of financial, distribution, marketing and other resources and some of them have greater market presence and name recognition. We compete directly or indirectly with the following types of companies:

· mass merchandisers, warehouse clubs, discount stores and department stores, such as Wal-Mart;

· direct marketer competitors through all media, including the Internet; and

· major national insurance companies and providers of roadside assistance such as AAA.

Additional competitors may enter the businesses in which we operate and further competition. It is also possible that additional competitors may enter the direct and website publishing business, where competition is centered on advertising rates, the nature and size of the audience, effectiveness of sales teams and editorial quality. If any of our competitors successfully provides a broader, more efficient or attractive combination of products and services to our target customers, our business results could be materially adversely affected. Our inability to compete effectively with existing or potential competitors could have a material adverse effect on our business, financial condition and results of operations.

The interests of the holders of our debt instruments may conflict with the interests of our principal owner and the interests of our directors or executive officers that have relationships with certain of our affiliates or other companies.

We are a wholly-owned subsidiary of ~~AGHI~~Affinity Group Holding, LLC (or the “Parent”) which also converted to a limited liability company on March 2, 2011, ~~which~~and ~~is an indirectly wholly-owned subsidiary of AGI Holding Corp. (“AGHC”), a privately held company. Stephen Adams, our Chairman, indirectly beneficially owns 100~~90% of the outstanding shares of AGHC. Accordingly, Mr. Adams will be able to elect our board of directors and to control matters submitted to the vote of our shareholders. In addition, Mr. Adams has numerous other business interests including FreedomRoads Holding Company, LLC (“FreedomRoads”), which is ~~also~~ indirectly owned ~~100%~~ by ~~AGHC.~~AGI We and our Camping World subsidiary are parties to a long term Cooperative Resources Agreement with FreedomRoads pursuant to which, among other things, each party shares certain data with the other and each agrees to market and advertise certain aspects of the other’s businesses. Under such agreement, FreedomRoads has in the past and will (pursuant to an amendment and restatement of such agreement entered into in October 2010), pay us a licensing fee for the use of the Camping World name, beginning with the quarter ended December 31, 2010. Payments under such agreement are expected to aggregate $3.7 million annually; however, there can be noHolding

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Corp. (“AGHC”), a privately held company. Stephen Adams, our Chairman, indirectly beneficially owns 100% of the outstanding shares of AGHC. Accordingly, Mr. Adams will be able to elect our board of directors and to control matters submitted to the vote of our members. In addition, Mr. Adams has numerous other business interests including FreedomRoads Holding Company, LLC (“FreedomRoads”), which is also indirectly owned 100% by AGHC. We and our Camping World subsidiary are parties to a long term Cooperative Resources Agreement with FreedomRoads pursuant to which, among other things, each party shares certain data with the other and each agrees to market and advertise certain aspects of the other’s businesses. Pursuant to an amendment and restatement of such agreement in October 2010, FreedomRoads has, since the quarter ended December 31, 2010, and will continue to pay us a licensing fee for the use of the Camping World name. Payments under such agreement are expected to aggregate $3.7 million annually; however, there can be no assurance that, in the future, FreedomRoads will have the funds available to satisfy its obligations under such agreement or that in the event of a breach or default by FreedomRoads of its obligations under the agreement, we would be able to recover any damages or losses. See “~~Summary—Summary Historical and As Adjusted Consolidated Financial Data” and “~~Certain Relationships and Related Transactions—FreedomRoads Cooperative Resources Agreement.”

InSince January 2011, Marcus Lemonis ~~was~~has ~~appointed~~been President and Chief Executive Officer of the Company. In addition, he also serves as Chief Executive Officer and President of FreedomRoads, and ~~Chief Executive Officer and President of~~ our Camping World subsidiary. Certain other officers and key employees of the Company are also officers or employees of FreedomRoads. Certain executive officers of the Company, including Messrs. Adams, Lemonis, Wolfe and Moody, are also officers of one or more of the holding companies between our immediate parent, AGHI, and AGHC. Certain of our directors, including Messrs. Adams and Baltins, are also directors of one or more of the holding companies between our immediate parent, AGHI, and AGHC. With some of our executive officers or directors holding these positions with different entities, transactions may occur in the future between us and FreedomRoads or other companies which could give rise to a conflict of interest on the part of such officers or directors.

Dealerships controlled by subsidiaries of FreedomRoads share facilities with many of our Camping World stores, allocating expenses in a manner that is believed by management to be fair and reasonable to both. There can also be no assurance that FreedomRoads will continue to sell RVs at Camping World retail locations or other locations affiliated with us or our restricted subsidiaries, the result of which could have an adverse effect on our business operations and/or financial condition. In addition, transactions may occur in the future between us and FreedomRoads or other companies which could give rise to a conflict of interest on the part of Mr. Adams, Mr. Lemonis, other directors or executive officers of the Company who also serve as officers or directors of such other companies. Any such conflict of interest could have a material adverse effect on our business, results of operations or financial condition.

Although we believe that the relationship between us and FreedomRoads is beneficial to us and provides us with competitive advantages that would be otherwise unavailable to us, circumstances may occur in which the interests of Mr. Adams or FreedomRoads could be in conflict with the interests of the holders of our debt instruments. For example, Mr. Adams may have an interest in pursuing acquisitions, divestitures or other transactions that, in his judgment, could enhance the value of his equity investment or one or more of the holding companies above AGHI may have need for funds so there could be pressure on the Company to make distributions up the holding company structure, even though such transactions and distributions may not benefit us or may involve risks to the holders of our debt instruments.

For more information regarding related party transactions, see “Certain Relationships and Related Transactions.”

If we are unable to retain senior executives and attract and retain other qualified employees, our business might be adversely affected.

Our success depends in part on our ability to attract, hire, train and retain qualified managerial, sales and marketing personnel. Competition for these types of personnel is high. We may be unsuccessful in attracting and retaining the personnel we require to conduct our operations successfully and, in such an event, our business could be materially and adversely affected. Our success also depends to a significant extent on the continued service and performance of our senior management team. The loss of any member of our senior management team could impair our ability to execute our business plan and could therefore have a material adverse effect on our business, results of operations and financial condition. We do not currently maintain key-man life insurance policies on any member of our senior management team or other key employees.

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attracting and retaining the personnel we require to conduct our operations successfully and, in such an event, our business could be materially and adversely affected. Our success also depends to a significant extent on the continued service and performance of our senior management team. The loss of any member of our senior management team could impair our ability to execute our business plan and could therefore have a material adverse effect on our business, results of operations and financial condition. We do not currently maintain key-man life insurance policies on any member of our senior management team or other key employees.

We must successfully order and manage our inventory to reflect consumer demand in a volatile market and anticipate changing consumer preferences and buying trends or our operating results could suffer.

Our success depends upon our ability to successfully manage our inventory and to anticipate and respond to merchandise trends and consumer demands in a timely manner. The retail consumer industry, by its nature, is volatile and sensitive to numerous economic factors, including consumer preferences, competition, market conditions and general economic conditions. None of these factors are within our control. We cannot predict consumer preferences with certainty, and consumer preferences often change over time. We usually must order merchandise well in advance of the following selling season. The extended lead times for many of our purchases may make it difficult for us to respond rapidly to new or changing product trends, increases in consumer demand or changes in prices. We have recorded changes in required reserves in recent periods due to changes in strategic direction, such as discontinuances of product lines as well as changes in market conditions due to changes in demand requirements. If we misjudge either the market for our merchandise or our consumers’ purchasing habits in the future, our revenues may decline significantly and we may not have sufficient quantities of merchandise to satisfy consumer demand or we may be required to mark down excess inventory, either of which could harm our operating results.

Reliance on our management information systems and electronic data processing systems exposes us to potential risks.

Reliance on our management information systems and electronic data processing systems exposes us to potential risks of interruptions due to natural disasters, cyber-attacks, unplanned outages, fraud perpetrated by malicious individuals or other causes. Our customer service and data processing operations are located in Denver, Colorado and Bowling Green, Kentucky. We rely on information technology systems to support our membership club, publishing and catalog operations and for purchasing, inventory distribution and control, sales reporting, accounts payable and merchandise management. We use these systems to monitor the performance of each store and mail order operation, to evaluate inventory levels, determine markdowns, analyze gross profit margins by product and to improve our business processes and supply chain efficiencies. Any unmitigated interruption of our information technology systems may have a negative impact on future financial results.

We primarily rely on two fulfillment and distribution centers for our retail, Internet and catalog businesses, and if there is a natural disaster or other serious disruption at either facility, we may be unable to deliver merchandise effectively to our stores or consumers.

We rely on two distribution and fulfillment centers located in Franklin, Kentucky and Bakersfield, California for our retail, Internet and catalog businesses. We handle almost all of our Internet and catalog orders through these two facilities. Any serious disruption at either facility due to a natural disaster or any other cause could damage our on-site inventory or impair our ability to use such distribution and fulfillment center. While we maintain business interruption insurance, as well as general property insurance, the amount of insurance coverage may not be sufficient to cover our losses in such an event. Any of these occurrences could impair our ability to adequately stock our stores or fulfill consumer orders and harm our operating results.

We lease all of our store locations. If we are unable to maintain those leases or locate alternative sites for our stores in our target markets and on terms that are acceptable to us, our net revenues and profitability could be adversely affected.

We lease all of the real properties where we have operations, including 8293 Camping World store retail locations in 32 states and our two distribution centers. Our real property leases generally provide for fixed monthly rentals with annual escalation clauses. There ~~Since~~can ~~2007,~~also webe ~~have~~no ~~closed~~assurance ~~one store and relocated two other stores when the leases for those locations expired. We cannot assure you~~ that we will be able to maintain our existing store locations as leases expire, extend the leases or be able to locate alternative sites in our target markets and on favorable terms. If we cannot maintain our existing store locations, extend the leases or locate alternative sites on favorable or acceptable terms, our business, results of operations and financial condition could be adversely affected.

20Dealerships controlled by subsidiaries of FreedomRoads share facilities with many of our Camping World stores. As of December 31, 2012, the Company leased 55 properties from FreedomRoads and sub-leased three properties to FreedomRoads, and Camping World was a joint tenant with FreedomRoads under 11 leases. There can also be no assurance that FreedomRoads will continue to sell RVs at Camping World retail locations or other locations affiliated with us or our restricted subsidiaries, the result of which could have an adverse effect on our business operations and/or financial condition.

Dealerships controlled by subsidiaries of FreedomRoads share facilities with many of our Camping World stores. As of December 31, 2011, the Company leased 40 properties from FreedomRoads and sub-leased three properties to FreedomRoads, and Camping World was a joint tenant with FreedomRoads under six leases. There can also be no assurance that FreedomRoads will continue to sell RVs at Camping World retail locations or other locations affiliated with us or our restricted subsidiaries, the result of which could have an adverse effect on our business operations and/or financial condition.

We may be unable to enforce our intellectual property rights and we may be accused of infringing intellectual property rights of third parties which could adversely affect our business.

We own a variety of registered trademarks and service marks for the names of our clubs, magazines and other publications. We also own the copyrights to certain articles in our publications. We believe that our trademark and copyrights have significant value and are important to our marketing efforts. If we are unable to continue to protect the trademarks and service marks for our proprietary brands, if such marks become generic or if third parties adopt marks similar to our marks, our ability to differentiate our products and services may be diminished. In the event that our trademarks or service marks are successfully challenged by third parties, we could lose brand recognition and be forced to devote additional resources to advertising and marketing new brands for our products.

From time to time, we may be compelled to protect our intellectual property, which may involve litigation. Such litigation may be time-consuming, expensive and distract our management from running the day-to-day operations of our business, and could result in the impairment or loss of the involved intellectual property. There is no guarantee that the steps we take to protect our intellectual property, including litigation when necessary, will be successful. The loss or reduction of any of our significant intellectual property rights could diminish our ability to distinguish our products from competitors’ products and retain our market share for our proprietary products. If we are unable to effectively protect our proprietary intellectual property rights our business, results of operations and financial condition could be adversely affected.

Other parties also may claim that we infringe their proprietary rights. Such claims, whether or not meritorious, may result in the expenditure of significant financial and managerial resources, injunctions against us or the payment of damages.

We may be subject to product liability claims if people or property are harmed by the products we sell.

Some of the products we sell may expose us to product liability claims relating to personal injury, death, or environmental or property damage, and may require product recalls or other actions. Although we maintain liability insurance, we cannot be certain that our coverage will be adequate for liabilities actually incurred or that insurance will continue to be available to us on economically reasonable terms, or at all. In addition, some of our agreements with our vendors and sellers do not indemnify us from product liability. In addition, even if a product liability claim is not successful or is not fully pursued, the negative publicity surrounding a product recall or any assertion that our products caused property damage or personal injury could damage our brand identity and our reputation with existing and potential consumers and have a material adverse effect on our business, financial condition and results of operations.

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personal injury could damage our brand identity and our reputation with existing and potential consumers and have a material adverse effect on our business, financial condition and results of operations.

Failure to protect the integrity and security of our customers’ information could expose us to litigation and materially damage our reputation.

We maintain a database with information about our approximately 1.73 million club members and a proprietary database of our approximately ~~nine~~ten million customers, which includes information such as order frequency, size of order, date of most recent order and type of merchandise purchased. We rely on proprietary and commercially available systems, software, tools and monitoring to provide security for processing, transmitting and storing confidential customer information, such as customer’s payment cards and personal information. There can be no assurance that our efforts to protect customer and confidential information will be successful. If any compromise of our information security were to occur, it could have a material adverse effect on our reputation, business, operating results and financial condition and may increase the costs we incur to protect against such information security breaches or subject us to fines, penalties or litigation.

Our failure to comply with certain environmental regulations could adversely affect our business.

The storage, distribution, transportation and disposal of some of the products that we sell are subject to a variety of federal and state environmental regulations. Our failure to comply with these regulations could have an adverse impact on our business. In addition, we have indemnified certain of our landlords for any hazardous waste which may be found on or about property we lease. If any such hazardous waste were to be found on property that we occupy, a significant claim giving rise to our indemnity obligation could adversely impact our operating results.

We may be named in litigation, which may result in substantial costs and divert management’s attention and resources.

We face legal risks in our business, including claims from disputes with our employees and our former employees and claims associated with general commercial disputes, product liability and other matters. Risks associated with legal liability often are difficult to assess or quantify and their existence and magnitude can remain unknown for significant periods of time. While we maintain director and officer insurance, as well as general and product liability insurance, the amount of insurance coverage may not be sufficient to cover a claim and the continued availability of this insurance cannot be assured. We may in the future be the target of litigation and this litigation may result in substantial costs and divert management’s attention and resources.

Risks Related to Our Debt

Our substantial debt could adversely affect our financial health.

We have a significant amount of debt, which requires significant interest payments. As of December 31, ~~2011~~2012, we had approximately $~~337~~332.45 million of total debt outstanding, net of original issue discount, of which $~~333~~325.06 million (without deduction for original issue discount in connection with the issuance of the Senior Secured Notes) consisted of our 11.5% senior secured noted due 2016 (“Senior Secured Notes”) and $1011.59 million was owed by Camping World and its subsidiaries under the Camping World credit facility (the “CW Credit Facility”). In addition, ~~the~~we ~~borrowers~~had ~~under~~additional ~~the~~borrowing CWavailability ~~Credit~~of ~~Facility had~~ $7.48 million ofunder ~~available~~the ~~borrowings~~CW Credit Facility. The Senior Secured Notes are secured by substantially all of our assets and the CW Credit Facility is secured by the assets of Camping World and its subsidiaries.

Our ability to satisfy our debt service obligations depends primarily on our operating performance. Future debt repayments by us, including the interest and principal on the Senior Secured Notes and the CW Credit Facility, may require funds in excess of our available cash flow. We cannot assure our stakeholders that we will be able to raise additional funds, if necessary, through future financings. The indenture pursuant to which the Senior Secured Notes were issued (the “Senior Secured Notes Indenture”) and the CW Credit Facility impose several restrictions upon our ability to incur additional indebtedness, pledge assets and make dividends and distributions.

2221

indenture pursuant to which the Senior Secured Notes were issued (the “Senior Secured Notes Indenture”) and the CW Credit Facility impose several restrictions upon our ability to incur additional indebtedness, pledge assets and make dividends and distributions.

Our substantial indebtedness could have important consequences to stakeholders in the Company. For example, it could: (i) increase our vulnerability to general adverse economic and industry conditions, (ii) require us to dedicate a substantial portion of our cash flow from operations to payments on our indebtedness, thereby reducing the availability of our cash flow to fund working capital, capital expenditures, expansion through acquisitions and other general corporate purposes, (iii) limit our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate, (iv) place us at a competitive disadvantage compared to our competitors that have less debt, and (v) limit our ability, among other things, to borrow additional funds.

Despite our current indebtedness level, we may still be able to incur significantly more debt, which could exacerbate the risks associated with our substantial leverage.

We may be able to incur substantial additional indebtedness in the future. Although certain covenants under the Senior Secured Notes Indenture and the CW Credit Facility limit our ability to incur additional indebtedness, the terms of the Senior Secured Notes Indenture and the CW Credit Facility permit us to incur significant additional indebtedness, including the replacement of the CW Credit Facility. If we incur additional indebtedness or such other obligations, the risks associated with our substantial indebtedness described above, including our possible inability to service our debt, could increase.

We will require a significant amount of cash to service our indebtedness, including the Senior Secured Notes and the CW Credit Facility. Our ability to generate cash depends on many factors beyond our control, and any failure to meet our debt service obligations could harm our business, financial condition and results of operations.

Our ability to make payments on and to refinance our indebtedness, including the Senior Secured Notes and the CW Credit Facility, and to fund working capital needs and planned capital expenditures will depend on our ability to generate cash in the future. Our ability to generate cash from operations is dependent on our financial and operating performance, which in turn is affected by general economic, financial, competitive, business, legislative, regulatory and other factors, including the availability of financing in the banking and capital markets that are beyond our control.

If our business does not generate sufficient cash flow from operations or if future borrowings are not available to us in an amount sufficient to enable us to pay our indebtedness, including the Senior Secured Notes and the CW Credit Facility, or to fund our other liquidity needs, we may need to refinance all or a portion of our indebtedness on or before the maturity thereof, sell assets, reduce or delay capital investments or seek to raise additional capital, any of which could have a material adverse effect on our operations. In addition, we may not be able to affect any of these actions, if necessary, on commercially reasonable terms or at all. Our ability to restructure or refinance our indebtedness will depend on the condition of the capital markets and our financial condition at such time. Any refinancing of our debt could be at higher interest rates and may require us to comply with more onerous covenants, which could further restrict our business operations. The terms of our existing or future debt instruments, including the Senior Secured Notes Indenture and the CW Credit Facility, may limit or prevent us from taking any of these actions. In addition, any failure to make scheduled payments of interest and principal on our outstanding indebtedness would likely result in a reduction of our credit rating, which could harm our ability to incur additional indebtedness on commercially reasonable terms or at all and negatively impact the market value of the Senior Secured Notes.

In addition, if we are unable to meet our debt service obligations under the Senior Secured Notes, including with respect to excess cash flow offers on the Senior Secured Notes or under the CW Credit Facility, the holders of our debt would have the right, following a cure period, to cause the entire principal amount of the indebtedness to become immediately due and payable. If the amounts outstanding under any of our debt instruments are accelerated, wethere ~~cannot~~can ~~assure~~be ~~you~~no assurance that our assets will be sufficient to repay in full the money owed to our debt holders.

2322

The Senior Secured Notes Indenture and the CW Credit Facility impose significant operating and financial restrictions, which may prevent us from pursuing certain business opportunities and taking certain actions.

The Senior Secured Notes Indenture and the CW Credit Facility contain operating and financial restrictions that limit or prohibit, among other things, our ability to:

· incur or guarantee additional indebtedness;

· pay dividends on, redeem or repurchase capital stock;

· make investments or repay subordinated indebtedness;

· make capital expenditures;

· engage in sale and leaseback transactions;

· enter into transactions with affiliates;

· sell assets;

· create liens; and

· engage in a consolidation, amalgamation or merger, or sell, transfer or otherwise dispose of all or substantially all of our or their assets.

These restrictions may prevent us from taking actions that we believe would be in the best interest of our business and may make it difficult for us to successfully execute our business strategy or effectively compete with companies that are not similarly restricted. We may also incur future debt obligations, including any future credit facilities permitted under the Senior Secured Notes Indenture in replacement of the CW Credit Facility, which might subject us to additional restrictive covenants that could affect our financial and operational flexibility. WeThere ~~cannot~~can ~~assure~~be ~~you~~no assurance that we will be granted waivers or amendments to these agreements if for any reason we are unable to comply with these agreements or that we will be able to refinance our debt on terms acceptable to us, or at all. The breach of any of these covenants and restrictions could result in a default under the agreements governing our indebtedness, including the Senior Secured Notes Indenture, the CW Credit Facility and any future credit facilities. An event of default under our debt agreements could permit our lenders or other debt holders to declare all amounts borrowed from them to become due and payable.

ITEM ~~2: PROPERTIES~~1B. UNRESOLVED STAFF COMMENTS

~~We lease all of the real properties where we have operations~~None. Our real property leases generally provide for fixed monthly rentals with annual escalation clauses. The table below sets forth certain information concerning our properties and the lease expiration date includes all stated option periods.

	Square Feet	Acres	Lease Expiration
Office Facilities:
Ventura, CA (corporate and media)	74,100		2039
Denver, CO (customer service, warehousing fulfillment, and information system functions)	60,000		2039
Bowling Green, KY (retail administrative headquarters and mail order operations)	31,278		2039
Chesterfield, VA (media sales office)	5,900		2013
Plymouth, MN (media headquarters)	15,871		2021
Retail Distribution Centers:
Bakersfield, California	164,747	14.827	2037
Franklin, Kentucky	250,000	33.000	2035

24ITEM 2: PROPERTIES

	Square Feet	Acres	Lease Expiration
Retail Store Locations:
Calera, AL (1)	11,190	10.064	2016
Dothan, AL(1)	18,906	11.275	2025
Oxford, AL(2)	11,828	23.940	2027
Robertsdale, AL(1)	19,670	18.360	2026
North Little Rock, AR(3)	20,592	10.000	2030
Avondale, AZ (1)	8,323	6.070	2017
Earnhardt, AZ(1)	4,690	24.000	2027
Flagstaff, AZ(3)	23,110	7.350	2044
Tucson, AZ	12,145	2.000	2020
Mesa, AZ	27,500	3.140	2047
Bakersfield, CA(1)	23,325	9.940	2023
La Mirada, CA	33,479	5.501	2037
San Marcos, CA	25,522	2.212	2015
Rocklin, CA	29,085	4.647	2024
San Bernardino, CA	18,126	1.665	2017
San Martin, CA	30,698	5.000	2024
Vacaville, CA(3)	35,917	8.700	2030
Valencia, CA(3)	64,410	9.231	2037
Colorado Springs, CO(1)	11,672	26.430	2027
Denver, CO	27,085	4.132	2037
Longmont, CO(1)	5,003	6.750	2026
Bartow, FL (1)	2,808	40.000	2018
Ft. Myers, FL	22,886	4.217	2012
Gulf Breeze, FL(1)	5,747	13.897	2026
Jacksonville, FL(1)	6,777	3.921	2016
Kissimmee, FL (3)	58,382	6.043	2037
Ocala, FL (1)	1,012	7.656	2017
St. Augustine, FL(1)	21,875	20.000	2026
Tampa, FL(2)	40,334	3.711	2026
Tallahassee, FL(1)	8,494	12.630	2024
Byron, GA	23,400	7.000	2042
Oakwood, GA(1)	4,510	7.681	2026
Savannah, GA(1)	6,285	4.898	2026
Woodstock, GA(1)	4,510	7.715	2026
Council Bluffs, IA	23,620	5.770	2043
Boise, ID(1)	6,033	12.690	2018

We lease all of the real properties where we have operations. Our real property leases generally provide for fixed monthly rentals with annual escalation clauses. The table below sets forth certain information concerning our offices and distribution facilities and the lease expiration date includes all stated option periods.

	Square Feet	Acres	Lease Expiration
Office Facilities:
Denver, CO (Membership Services customer service, warehousing fulfillment, and information system functions)	60,000		2039
Bowling Green, KY (Retail administrative headquarters and mail order operations)	31,278		2039
Chesterfield, VA (Membership Services - Media sales office)	5,900		2013
Plymouth, MN (Membership Services - Media headquarters)	15,871		2021
Retail Distribution Centers:
Bakersfield, California	164,747	14.827	2037
Franklin, Kentucky	250,000	33.000	2035

	Square Feet	Acres	Lease Expiration
Island Lake, IL(1)	8,657	17.028	2026
Indianapolis, IN(1)	7,690	30.000	2027
Bowling Green, KY	37,615	2.750	2042
Hammond, LA(2)	27,096	68.454	2034
Belleville, MI	44,248	7.260	2037
Grand Rapids, MI(2)	4,618	9.180	2037
Houghton Lake, MI(1)	6,840	9.500	2018
Rogers, MN	24,700	6.303	2025
Strafford, MO(3)	20,592	8.510	2030
Colfax, NC(1)	6,371	8.094	2026
Statesville, NC(1)	39,050	7.412	2024
Chichester, NH(1)	10,447	1.572	2026
Bridgeport, NJ	24,581	6.920	2031
Lakewood, NJ(1)	3,800	9.912	2027
Albuquerque, NM(1)	20,412	31.434	2026
Henderson, NV	25,850	4.400	2024
Las Vegas, NV(1)	3,422	15.840	2027
Bath, NY(1)	4,356	5.500	2026
Churchville, NY(1)	7,193	10.380	2026
Syracuse, NY(1)	12,242	8.190	2026
Akron, OH(1)	9,025	9.622	2026
Oklahoma City, OK(2)	12,500	8.219	2023
Hillsboro, OR(1)	2,400	6.070	2046
Junction City, OR(2)	21,401	1.970	2036
Wilsonville, OR	32,850	4.653	2021
Wood Village, OR(1)	6,495	11.070	2027
Columbia, SC	23,450	4.140	2025
Myrtle Beach, SC	38,962	5.410	2037
Myrtle Beach, SC(1)	2,298	18.940	2026
North Charleston, SC(1)	13,142	7.690	2027
Spartanburg, SC(1)	11,900	19.263	2033
Chattanooga, TN(1)	9,400	10.840	2024
Knoxville, TN(2)	10,763	24.580	2037
Nashville, TN	34,478	3.238	2037
Anthony, TX(1)	7,061	32.000	2025
Denton, TX	22,984	6.887	2024
Fort Worth, TX(2)	12,102	16.000	2026
Katy, TX(1)	25,913	38.861	2025
Mission, TX	23,094	3.430	2015
New Braunfels, TX(3)	43,397	19.100	2035
Draper, UT	27,675	8.031	2024
Roanoke, VA(3)	35,796	7.690	2043
Winchester, VA	19,400	4.120	2042
Burlington, WA(1)	23,033	6.500	2025
Fife, WA	35,659	5.840	2032
Madison, WI	20,400	4.866	2043

We also lease 93 retail locations, in 32 states, where we operate our Camping World retail operations. These stores range in size from approximately 10,000 to 64,000 square feet.

26ITEM 3: LEGAL PROCEEDINGS

~~(1) This~~From ~~store~~time isto ~~leased~~time, ~~from~~we aare ~~FreedomRoads~~involved ~~dealership~~in ~~and~~litigation ~~the~~arising ~~acreage~~in ~~reflects~~ the ~~total~~normal ~~dealership~~course ~~property~~of business operations. We ~~The~~are ~~square~~not ~~footage~~party ~~reported~~to isany ~~the~~pending ~~portion~~legal ofproceedings ~~the~~that ~~building~~we ~~leased~~believe byare ~~Camping~~material ~~World, Inc~~to our business or financial condition.

~~(2) This~~ITEM ~~store~~4: MINE isSAFETY located with an RV dealership (other than a FreedomRoads dealership) and the acreage reflects the total dealership property. The square footage reported is the portion of the building leased by Camping World, Inc.DISCLOSURES

~~(3) The~~Not store is co-located with a FreedomRoads dealership wherein Camping World, Inc. and the dealership are co-tenants or the dealership subleases space from Camping World, Inc. The square footage reported is the portion of the building leased by Camping World, Inc.Applicable

~~ITEM 3: LEGAL PROCEEDINGS~~PART II

~~From~~ITEM ~~time~~5: MARKET toFOR ~~time,~~REGISTRANT’S weCOMMON ~~are~~EQUITY, ~~involved~~RELATED inSTOCKHOLDER ~~litigation~~MATTERS ~~arising~~AND inISSUER ~~the~~PURCHASES ~~normal~~OF ~~course~~EQUITY ~~of business operations. We are not party to any pending legal proceedings that we believe are material to our business.~~SECURITIES

~~ITEM~~The 4:Company is a wholly-owned subsidiary of Affinity Group Holding, LLC. ~~MINE~~There ~~SAFETY~~is ~~DISCLOSURES~~no established public trading market for our membership units. There have not been any sales or repurchases of our common equity during the last two fiscal years.

~~Not Applicable~~24

~~PART II~~ITEM 6: SELECTED FINANCIAL DATA

~~ITEM~~The 5:selected financial data of our Company for each of the five years ended December 31 are derived from our audited consolidated financial statements. ~~MARKET~~This ~~FOR~~information ~~REGISTRANT~~is only a summary and should be read in conjunction with “Management’Ss ~~COMMON~~Discussion ~~EQUITY~~and Analysis of Financial Condition and Results of Operations and Comprehensive Income (Loss),” ~~RELATED~~and ~~STOCKHOLDER~~our ~~MATTERS~~consolidated ~~AND~~financial ~~ISSUER~~statements ~~PURCHASES~~and OFthe ~~EQUITY~~Notes ~~SECURITIES~~thereto included herein.

Not Applicable

	Year ended
	(dollars in thousands)
Statement of Operations Data:	2012			2011			2010			2009			2008
REVENUES:
Membership services	$	153,788		$	147,806		$	146,274		$	142,147		$	152,643
Retail	325,774			282,366			270,551			270,573			291,070
Membership services - media	39,180			51,232			53,844			59,061			82,424
	518,742			481,404			470,669			471,781			526,137

COSTS APPLICABLE TO REVENUES:
Membership services	86,525			81,521			85,211			84,826			90,758
Retail	201,699			167,431			157,574			164,510			170,911
Membership services - media	26,598			39,803			40,584			46,079			61,126
	314,822			288,755			283,369			295,415			322,795

GROSS PROFIT	203,920			192,649			187,300			176,366			203,342

OPERATING EXPENSES:
Selling, general and administrative	141,427			130,845			126,577			128,917			142,757
Goodwill impairment	-			-			-			46,884			47,601
Impairment of investment in affiliate	-			-			-			-			81,005
Financing expense (recovery)	-			(19		)	14,364			2,607			-
Depreciation and amortization	14,457			16,512			18,536			21,076			19,798
	155,884			147,338			159,477			199,484			291,161

INCOME (LOSS) FROM OPERATIONS	48,036			45,311			27,823			(23,118		)	(87,819		)

NON-OPERATING ITEMS:
Interest expense, net	(42,946		)	(44,671		)	(38,732		)	(30,356		)	(23,649		)
Gain (loss) on derivative instrument (1)	3,871			3,899			(6,680		)	745			(2,394		)
Gain (loss) on debt restructure	-			-			(2,678		)	4,678			-
Loss on debt repayment	(440		)	-			-			-			-
Gain (loss) on sale of assets	1,171			632			1			(604		)	(321		)
Other non-operating expense, net	-			-			-			(659		)	(2		)
	(38,344		)	(40,140		)	(48,089		)	(26,196		)	(26,366		)

INCOME (LOSS) FROM OPERATIONS BEFORE INCOME TAXES	9,692			5,171			(20,266		)	(49,314		)	(114,185		)

INCOME TAX (EXPENSE) BENEFIT	(317		)	(1,264		)	1,493			10,366			2,213

NET INCOME (LOSS)	9,375			3,907			(18,773		)	(38,948		)	(111,972		)

OTHER COMPREHENSIVE INCOME (LOSS)
Unrealized gain (loss) on interest rate swap	-			-			191			(3,337		)	(5,632		)
Gain on interest rate swap reclassified into earnings	-			-			6,809			-			-

COMPREHENSIVE INCOME (LOSS)	$	9,375		$	3,907		$	(11,773	)	$	(3,337	)	$	(5,632	)

2725

~~ITEM 6:~~ SELECTED FINANCIAL DATA (continued)

The selected financial data of our company for each of the five years ended December 31 are derived from our audited consolidated financial statements. This information is only a summary and should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Capitalization” and our consolidated financial statements and the Notes thereto included herein.

	December 31,
(dollars in thousands)	2012			2011			2010			2009			2008

Balance Sheet Data (at period end):
Working capital (deficiency)	$	16,163		$	5,601		$	10,644		$	(7,609	)	$	(10,494	)
Total assets	230,361			222,963			222,018			221,569			294,352
Deferred revenues and gains (2)	88,899			85,849			90,389			96,335			96,424
Total debt	332,470			337,450			332,231			278,414			292,146
Total stockholders’ deficit	(243,796		)	(253,796		)	(252,173		)	(221,525		)	(186,514		)

	Year ended
	(dollars in thousands)
Statement of Operations Data:	2011			2010			2009			2008			2007
REVENUES:
Membership services	$	147,806		$	146,274		$	142,147		$	152,643		$	149,937
Media	51,232			53,844			59,061			82,424			90,537
Retail	282,366			270,551			270,573			291,070			321,730
	481,404			470,669			471,781			526,137			562,204
COSTS APPLICABLE TO REVENUES:
Membership services	81,521			85,211			84,826			90,758			94,840
Media	39,803			40,584			46,079			61,126			62,258
Retail	167,431			157,574			164,510			170,911			194,940
	288,755			283,369			295,415			322,795			352,038
GROSS PROFIT	192,649			187,300			176,366			203,342			210,166
OPERATING EXPENSES:
Selling, general and administrative	130,845			126,577			128,917			142,757			145,556
Goodwill impairment	-			-			46,884			47,601			-
Impairment of investment in affiliate	-			-			-			81,005			-
Financing expense (recovery)	(19		)	14,364			2,607			-			-
Depreciation and amortization	16,512			18,536			21,076			19,798			18,948
	147,338			159,477			199,484			291,161			164,504
INCOME (LOSS) FROM OPERATIONS	45,311			27,823			(23,118		)	(87,819		)	45,662
NON-OPERATING ITEMS:
Interest expense, net	(44,671		)	(38,732		)	(30,356		)	(23,649		)	(24,227		)
Gain (loss) on derivative instrument (1)	3,899			(6,680		)	745			(2,394		)	-
Gain (loss) on debt restructure	-			(2,678		)	4,678			-			(775		)
Gain (loss) on sale of assets	632			1			(604		)	(321		)	(150		)
Other non-operating income (expense), net	-			-			(659		)	(2		)	1
	(40,140		)	(48,089		)	(26,196		)	(26,366		)	(25,151		)
INCOME (LOSS) FROM OPERATIONS BEFORE INCOME TAXES	5,171			(20,266		)	(49,314		)	(114,185		)	20,511
INCOME TAX (EXPENSE) BENEFIT	(1,264		)	1,493			10,366			2,213			(1,583		)
NET INCOME (LOSS)	$	3,907		$	(18,773	)	$	(38,948	)	$	(111,972	)	$	18,928

(1) The 2012 and 2011 gain on derivative instrument was due to the change in value of the $100.0 million and $20.0 million interest rate swap agreements. The 2010 loss on derivative instrument was due to the $100.0 million and $20.0 million interest rate swap agreements no longer meeting the requirements for hedge accounting as the Company replaced its variable rate debt with fixed rate debt on December 1, 2010 and reclassed the amounts recorded in Other Comprehensive Loss to earnings. The 2009 gain on derivative instrument is due to the change in value of the $35.0 million interest rate swap agreement effective April 30, 2008, and $20.0 million of the $100.0 million interest rate swap agreement effective October 15, 2007. The 2008 loss on derivative instrument relates solely to the change in value of the $35.0 million interest rate swap. Both interest rate swap agreements expired on October 31, 2012.

28(2) Deferred revenues represent cash received by us in advance of the recognition of revenues in accordance with accounting principles generally accepted in the United States. Deferred revenues primarily reflect club membership dues, annual roadside assistance fees, advances on third party credit card fee revenues and publication subscriptions. These revenues are recognized at the time the goods or services are provided or over the membership period, which averages approximately 15 months. The deferred revenue balance for 2012, 2011, 2010, 2009 and 2008 also include deferred gains of $7.0 million, $7.5 million, $7.9 million, $8.4 million and $8.9 million, respectively, from the real estate sale-leaseback transactions which occurred in December 2001.

~~SELECTED FINANCIAL DATA (continued)~~26

	December 31,
(dollars in thousands)	2011		2010		2009		2008		2007
Balance Sheet Data (at period end):
Working capital (deficiency)	$ 5,601		$ 10,644		$ (7,609	)	$ (10,494	)	$ (21,064	)
Total assets	222,963		222,018		221,569		294,352		421,611
Deferred revenues and gains (2)	85,849		90,389		96,335		96,424		104,390
Total debt	337,450		332,231		278,414		292,146		287,173
Total stockholders’ deficit	(253,796	)	(252,173	)	(221,525	)	(186,514	)	(66,910	)

ITEM 7: MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS and Comprehensive Income (Loss)

~~(1)~~ The ~~2011~~following ~~gain~~tables onset ~~derivative~~forth ~~instrument was due to~~ the ~~change~~components ~~in value~~ of the ~~$100~~statements ~~million~~of ~~and~~operations ~~$20~~for ~~million~~the ~~interest~~years ~~rate~~ended ~~swap~~December 31, ~~agreements.~~2012, ~~The~~2011, ~~2010 loss on derivative instrument was due to the $100.0 million~~ and ~~$20.0~~2010 ~~million interest rate swap agreements no longer meeting the requirements for hedge accounting~~ as ~~the~~a ~~Company~~percentage ~~replaced~~of ~~its~~total ~~variable rate debt with fixed rate debt on December 1~~revenues, ~~2010~~ and ~~reclassed~~ the ~~amounts~~comparison ~~recorded~~of inthose ~~Other~~components ~~Comprehensive~~from ~~Loss~~period to ~~earnings~~period. The ~~2009~~following ~~gain~~discussion ~~on derivative instrument~~ is ~~due~~based toon ~~the~~our ~~change~~Consolidated inFinancial ~~value~~Statements ofincluded ~~the~~elsewhere ~~$35~~herein.0 Our ~~million~~revenues ~~interest~~are ~~rate~~derived ~~swap~~principally ~~agreement~~from ~~effective~~membership ~~April 30~~services, ~~2008,~~including ~~and~~club ~~$20.0~~membership ~~million~~dues ofand ~~the~~marketing ~~$100.0~~fees ~~million~~paid ~~interest~~to ~~rate~~us ~~swap~~for ~~agreement~~services ~~effective~~provided ~~October 15,~~by ~~2007. The~~third ~~2008~~parties, ~~loss~~from onpublications, ~~derivative~~including ~~instrument~~subscriptions ~~relates~~and ~~solely~~advertising, toand ~~the~~from ~~change~~retail ~~in value of the $35~~sales.~~0 million interest rate swap.~~

(2) Deferred revenues represent cash received by us in advance of the recognition of revenues in accordance with accounting principles generally accepted in the United States. Deferred revenues primarily reflect club membership dues, annual ERS fees, advances on third party credit card fee revenues and publication subscriptions. These revenues are recognized at the time the goods or services are provided or over the membership period, which averages approximately 17 months. The deferred revenue balance for 2011, 2010, 2009, 2008 and 2007 also include deferred gains of $7.5 million, $7.9 million, $8.4 million, $8.9 million, and $9.3 million, respectively, from the real estate sale-leaseback transactions which occurred in December 2001.

	Percentage of						Percentage Increase/
	Total Revenues						(Decrease)

							Year 2012		Year 2011
	2012		2011		2010		over 2011		over 2010

REVENUES:
Membership services	29.6%		30.7%		31.1%		4.0%		1.0%
Retail	62.8%		58.7%		57.5%		15.4%		4.4%
Membership services - media	7.6%		10.6%		11.4%		(23.5%	)	(4.9%	)
	100.0%		100.0%		100.0%		7.8%		2.3%

COSTS APPLICABLE TO REVENUES:
Membership services	16.7%		16.9%		18.1%		6.1%		(4.3%	)
Retail	38.9%		34.8%		33.5%		20.5%		6.3%
Membership services - media	5.1%		8.3%		8.6%		(33.2%	)	(1.9%	)
	60.7%		60.0%		60.2%		9.0%		1.9%

GROSS PROFIT	39.3%		40.0%		39.8%		5.9%		2.9%

OPERATING EXPENSES:
Selling, general and administrative	27.2%		27.2%		26.9%		8.1%		3.4%
Financing expense (recovery)	-		-		3.1%		(100.0%	)	(100.1%	)
Depreciation and amortization	2.8%		3.4%		3.9%		(12.4%	)	(10.9%	)
	30.0%		30.6%		33.9%		5.8%		(7.6%	)

INCOME FROM OPERATIONS	9.3%		9.4%		5.9%		6.0%		62.9%

NON-OPERATING ITEMS:
Interest income	0.2%		0.1%		0.1%		55.1%		10.2%
Interest expense	(8.3%	)	(9.4%	)	(8.3%	)	(3.1%	)	15.3%
Gain (loss) on derivative instrument	0.7%		0.8%		(1.4%	)	(0.7%	)	(158.4%	)
Loss on debt restructure	-		-		(0.6%	)	-		(100.0%	)
Loss on debt repayment	(0.1%	)	-		-		(100.0%	)	-
Gain on sale of assets	0.2%		0.2%		-		85.3%		nm
	(7.3%	)	(8.3%	)	(10.2%	)	(4.5%	)	(16.5%	)

INCOME (LOSS) FROM OPERATIONS BEFORE INCOME TAXES	2.0%		1.1%		(4.3%	)	87.4%		(125.5%	)

INCOME TAX (EXPENSE) BENEFIT	(0.2%	)	(0.3%	)	0.3%		(74.9%	)	(184.7%	)

NET INCOME (LOSS)	1.8%		0.8%		(4.0%	)	140.0%		(120.8%	)

OTHER COMPREHENSIVE INCOME (LOSS)
Unrealized gain on interest rate swap	-		-		-		-		(100.0%	)
Gain on interest rate swap reclassified into earnings	-		-		1.4%		-		(100.0%	)

COMPREHENSIVE INCOME (LOSS)	1.8%		0.8%		(2.5%	)	140.0%		(133.2%	)

2927

~~ITEM~~Year 7:Ended ~~MANAGEMENT’S~~December 31, ~~DISCUSSION~~2012 ~~AND~~compared ~~ANALYSIS~~with OFYear ~~FINANCIAL~~Ended ~~CONDITION~~December 31, ~~AND RESULTS OF OPERATION~~2011

The following tables set forth the components of the statements of operations for the years ended December 31, 2011, 2010, and 2009 as a percentage of total revenues, and the comparison of those components from period to period. The following discussion is based on our Consolidated Financial Statements included elsewhere herein. Our revenues are derived principally from membership services, including club membership dues and marketing fees paid to us for services provided by third parties, from publications, including subscriptions and advertising, and from retail sales.Revenues

	Percentage of						Percentage Increase/
	Total Revenues						(Decrease)
							Year 2011	Year 2010
	2011		2010		2009		over 2010	over 2009
REVENUES:
Membership services	30.7%		31.1%		30.1%		1.0%	2.9%
Media	10.6%		11.4%		12.5%		(4.9%)	(8.8%	)
Retail	58.7%		57.5%		57.4%		4.4%	-
	100.0%		100.0%		100.0%		2.3%	(0.2%	)
COSTS APPLICABLE TO REVENUES:
Membership services	16.9%		18.1%		18.0%		(4.3%)	0.5%
Media	8.3%		8.6%		9.8%		(1.9%)	(11.9%	)
Retail	34.8%		33.5%		34.8%		6.3%	(4.2%	)
	60.0%		60.2%		62.6%		1.9%	(4.1%	)
GROSS PROFIT	40.0%		39.8%		37.4%		2.9%	6.2%
OPERATING EXPENSES:
Selling, general and administrative	27.2%		26.9%		27.3%		3.4%	(1.8%	)
Goodwill impairment	-		-		9.9%		-	(100.0%	)
Financing expense (recovery)	-		3.1%		0.6%		(100.1%)	100.0%
Depreciation and amortization	3.4%		3.9%		4.5%		(10.9%)	(12.1%	)
	30.6%		33.9%		42.3%		(7.6%)	(20.1%	)
INCOME (LOSS) FROM OPERATIONS	9.4%		5.9%		(4.9%	)	(62.9%)	220.4%
NON-OPERATING ITEMS:
Interest income	0.1%		0.1%		0.1%		10.2%	(3.5%	)
Interest expense	(9.4%	)	(8.3%	)	(6.5%	)	15.3%	27.1%
Gain (loss) on derivative instrument	0.8%		(1.4%	)	0.2%		(158.4%)	(996.6%	)
Gain (loss) on debt restructure	-		(0.6%	)	1.0%		(100.0%)	(157.2%	)
Gain (loss) on sale of assets	0.2%		-		(0.2%	)	nm	(100.2%	)
Other non-operating (expense) income, net	-		-		(0.2%	)	nm	(100.0%	)
	(8.3%	)	(10.2%	)	(5.6%	)	(16.5%)	83.6%
INCOME (LOSS) FROM OPERATIONS
BEFORE INCOME TAXES	1.1%		(4.3%	)	(10.5%	)	125.5%	58.9%
INCOME TAX (EXPENSE) BENEFIT	(0.3%	)	0.3%		2.2%		(184.7%)	(85.6%	)
NET INCOME (LOSS)	0.8%		(4.0%	)	(8.3%	)	120.8%	51.8%

Revenues of $518.7 million for 2012 increased by $37.3 million, or 7.8%, from 2011.

30Membership Services revenues for 2012 of $153.8 million increased $6.0 million, or 4.0%, from 2011. This revenue increase was largely attributable to a $6.2 million increase in extended vehicle warranty program revenue due to contract price increases and the development of additional programs, a $1.6 million increase in roadside assistance revenue, a $2.4 million increase in member events revenue due to two additional annual member rallies, and a $0.6 million increase in marketing fee revenue from health and life insurance products. These increases were partially offset by a $3.3 million decrease in revenue primarily as a result of merging the President’s Club into the Good Sam Club, an $0.8 million decrease in the Coast to Coast and Golf Card Club revenue due to decreased membership and the sale of the Golf Card Club in March 2012, and a $0.7 million decrease in other club revenue.

~~Year~~Retail ~~Ended~~revenues ~~December 31~~of $325.8 million for 2012 increased $43.4 million, or 15.4%, from 2011. Store ~~compared~~merchandise ~~with~~sales ~~Year~~increased ~~Ended~~$34.2 ~~December 31~~million from 2011 due to a same store sales increase of $19.3 million, or 9.9%, (compared to a 1.1% decrease in same store sales for 2011 versus 2010), and a $17.3 million revenue increase from the opening of seventeen new stores over the past twenty-four months, partially offset by decreased revenue from discontinued stores of $2.4 million. Three stores were closed in the last twenty-four months in order to reduce fixed operating costs and to consolidate operations within the respective trade areas. Same store sale calculations for a given period include only those stores that were open both at the end of that period and at the beginning of the preceding fiscal year. Also, mail order and internet sales increased $14.4 million primarily due to increases in selling expense for direct channel advertising and search engine marketing, supplies and other sales decreased $1.3 million, and installation and service fees decreased $3.9 million.

~~Revenues~~Membership Services - Media revenues of $39.2 million for 2012 decreased $12.1 million, or 23.5%, from 2011. This decrease was primarily attributable to a $3.9 million revenue reduction resulting from the sale or closure of non-core media businesses in 2011, a $1.6 million reduction in circulation and advertising magazine revenue, a $1.1 million reduction in consumer show revenue resulting from reduced sponsorship revenue and 3 fewer shows produced, and a $5.5 million reduction in annual directory revenues due to combining two annual directories in order to create an upgraded product with reduced brand confusion, reduced direct mail marketing and phase out the unprofitable CD/DVD version.

~~Revenues~~Costs ofApplicable ~~$481.4~~to ~~million for 2011 increased by $10.7 million, or 2.3%, from 2010.~~Revenues

~~Membership~~Costs ~~Services~~applicable to revenues ~~for~~totaled ~~2011 of~~ $~~147~~314.8 million ~~increased $1.5 million~~, ~~or 1.0%, from 2010. This revenue increase was largely attributable to a $4.3 million increase in extended vehicle warranty program revenue, due to~~ an increase inof ~~the average price per contract, and a~~ $226.81 million increase in license fees received from FreedomRoads. These increases were partially offset by a $3.4 million decrease in vehicle insurance program revenue primarily from the $2.5 million fee received in 2010 as a result of waiving our right of first refusal regarding the sale of the third party provider of vehicle insurance, aor $19.0 ~~million reduction in dealer program marketing revenue~~%, ~~a $0.8 million revenue reduction~~ from the ~~Coast~~comparable toperiod ~~Coast Club and Golf Card Club primarily attributable to decreased membership, and a $0.4 million reduction~~ in ~~member events revenue~~2011.

~~Media~~Membership Services costs applicable to revenues of $5186.25 million ~~for~~increased ~~2011 decreased~~ $25.60 million, or 46.91%, from ~~2010~~2011. This ~~decrease~~increase ~~was~~consisted ~~primarily~~of ~~attributable to~~ a $34.59 million ~~revenue~~increase ~~reduction~~in ~~related~~marketing toand ~~the~~program ~~sale~~costs offor ~~five~~extended ~~publication~~vehicle ~~businesses~~warranty inprograms, ~~2011~~a ~~(RV~~$3.4 ~~Business~~million ~~magazine~~increase indue ~~March 2011,~~to ~~Powerboat~~two ~~magazine~~additional inannual ~~May 2011~~member rallies, ~~Trailer~~a ~~Boats~~$3.2 ~~magazine~~million increase in ~~May 2011,~~roadside ~~guest~~assistance ~~services~~marketing ~~campground~~and ~~guides~~program ~~in June 2011~~costs, and ~~ATV~~a ~~Magazine in October 2011)~~$1. In3 ~~addition,~~million ~~two~~increase ~~fewer~~in ~~issues~~costs ofassociated ~~motorcycle~~with ~~magazines~~the ~~were~~vehicle ~~published~~insurance inprograms. These ~~2011,~~increases ~~resulting~~were inpartially ~~reduced~~offset ~~revenue~~by ofa $05.45 million, program and ~~other~~marketing ~~conferences~~cost ~~and~~decrease ~~internet~~primarily ~~revenue~~attributable ~~decreased~~to bymerging ~~$0.4~~the ~~million. These~~President’s ~~decreases~~Club ~~were~~into ~~partially~~the ~~offset~~Good bySam Club, a $1.23 million ~~increase~~reduction in ~~corporate~~other ~~sponsorships~~club ~~in the consumer shows group~~costs, and a $01.50 million ~~increase~~expense inreduction ~~annual~~from ~~directory~~the ~~revenue~~Coast to Coast and Golf Card clubs.

Retail ~~revenues~~costs ofapplicable ~~$282.4~~to ~~million~~revenues ~~for 2011~~ increased $1134.83 million, or 420.45%, ~~from~~to ~~2010. Store merchandise sales decreased~~ $0201.7 million. The ~~from~~retail ~~2010~~gross ~~due~~profit tomargin ~~a same store sales decrease~~ of $238.1 ~~million, or 1.1~~%, ~~(compared to a 0.5% decrease in same store sales~~ for ~~2010),~~2012 ~~and~~ decreased ~~revenue~~ from ~~discontinued stores of $1~~40.47% ~~million,~~for ~~partially~~2011 ~~offset~~primarily bydue ~~a $2.8 million revenue increase from the opening of six new stores over the past twenty-four months Two stores were closed in the last twenty-four months in order~~ to ~~reduce~~decreased ~~fixed~~installation ~~operating costs~~ and toservice ~~consolidate~~fees, ~~operations~~incremental ~~within~~merchandise ~~the~~discounts ~~respective trade areas. Same store sale calculations for a given period include only those stores that were open both at the end of that period~~ and atmarkdowns ~~the~~to ~~beginning~~drive oftraffic ~~the~~in ~~preceding fiscal year. Also, mail~~ order ~~and~~to ~~internet~~expand ~~sales increased $10.6 million, supplies and other sales increased $1.8 million, and installation and service fees increased $0.1 million.~~

~~Costs Applicable to Revenues~~28

~~Costs~~the ~~applicable~~base of customers available to ~~revenues~~promote ~~totaled~~our ~~$288.8~~higher ~~million,~~margin anMembership ~~increase~~Services ofproducts ~~$5.4~~and ~~million~~services, ~~or 1.9%~~and, ~~from~~to ~~the~~a ~~comparable~~lesser ~~period~~extent, increased shipping and freight-in ~~2010~~costs.

Membership Services - Media costs applicable to revenues of $8126.56 million for 2012 decreased $313.72 million, or 433.32%, from ~~2010. This~~2011 ~~decrease~~due ~~consisted~~to of a $4.7 million decrease infrom ~~emergency~~the ~~road~~sale ~~service~~or ~~costs~~closure ~~primarily~~of ~~due~~non-core tomedia ~~lower~~businesses ~~average~~in ~~claim costs~~2011, a $04.91 million reduction infrom ~~the~~combining ~~dealer~~our ~~program~~two ~~marketing~~annual campground directories, a $02.70 million ~~reduction~~decrease in ~~other~~wage-related ~~ancillary product~~ costs, awithin ~~$0.4~~ongoing ~~million~~businesses ~~reduction~~primarily indue ~~overhead~~to ~~costs~~headcount reductions, ~~and~~ a ~~net~~ $01.23 million reduction in ~~wage-related~~magazine costs ~~($0.7~~mostly ~~million~~related ofto ~~wage~~reduced ~~savings~~magazine ~~partially~~sizes ~~offset~~within bythe ~~$0.5~~outdoor ~~million~~powersports ~~of severance expense)~~group, ~~partially~~and ~~offset by~~ a $21.21 million ~~increase~~reduction infrom ~~extended~~consumer ~~vehicle~~show ~~warranty program~~ costs ~~relating~~due to ~~increased~~three ~~revenue~~fewer ~~from~~shows ~~those programs, and incremental Good Sam Club sponsorship fees and member publication costs of $1~~produced.~~0 million.~~

~~Media~~Operating costs applicable to revenues of $39.8 million for 2011 decreased $0.8 million, or 1.9%, from 2010 due to a $1.7 million expense reduction from the sale of five publication businesses in 2011, and a net $0.5 million reduction in wage-related costs (consisting of $1.1 million in wage savings partially offset by $0.6 million of severance expense), partially offset by a $0.9 million increase in annual directory costs and $0.5 million of incremental promotional costs related to the book division.Expenses

31Selling, general and administrative expenses of $141.4 million for 2012 increased $10.6 million compared to 2011. This increase was primarily due to a $10.2 million increase in retail selling, general and administrative expenses primarily related to increased retail labor, travel and training associated with new store openings, an incremental $2.1 million to promote the Good Sam brand, and $0.9 million of legal expenses, including the establishment of a settlement reserve. These selling, general and administrative expense increases were partially offset by a $1.6 million reduction in wage-related expenses and a $1.0 million reduction in other general and administrative expenses.

~~Retail~~Depreciation ~~costs~~and ~~applicable~~amortization toexpense ~~revenues~~of ~~increased~~ $914.95 million, orin ~~6.3%,~~2012 todecreased $~~167~~2.41 million~~. The~~ ~~retail gross profit margin of 40.7% for 2011 decreased~~ from ~~41.8%~~the ~~for~~prior ~~2010~~year primarily due to anreduced ~~increase~~capital inexpenditures ~~merchandise markdowns~~ in ~~order~~prior toyears, ~~drive~~and ~~increased~~completed ~~retail~~amortization ~~traffic~~of tocustomer ~~provide~~lists ~~greater~~related ~~opportunity~~ to ~~sell~~consumer ~~Good~~show ~~Sam~~purchases ~~memberships~~ and ~~other membership services to customers at~~ retail ~~stores~~non-compete agreements.

~~Operating~~Income ~~Expenses~~from Operations

~~Selling,~~Income ~~general~~from ~~and~~operations ~~administrative~~for ~~expenses~~2012 oftotaled $~~130~~48.80 million ~~for~~compared ~~2011~~to ~~increased~~ $445.3 million ~~compared~~for ~~to 2010~~2011. This ~~increase was due a~~ $52.07 million increase inwas ~~retail~~primarily ~~selling,~~the ~~general~~result ~~and~~of ~~administrative~~an ~~expenses,~~increase ~~primarily~~in ~~related~~gross toprofit ~~increased~~for ~~advertising~~the ~~and other selling expenses~~Retail, ~~$2.0~~Membership ~~million~~Services of– ~~incremental~~Media ~~wage-related~~and ~~expense,~~Membership ~~consisting~~Services segments of $19.21 million, ~~of severance and~~ $01.81 million ~~of other wage-related expense,~~ and a $1.0 million, ~~reimbursement~~respectively, ~~of legal expenses in 2010 related to the collection of a prior favorable judgment. These increases were~~ partially offset by aan $38.15 million ~~decrease~~increase in ~~deferred~~operating ~~executive compensation under the deferred compensation agreements, and a $0~~expenses.~~6 million decrease in professional fees.~~

~~Financing~~Non-Operating expense of $14.4 million was incurred in 2010 primarily for closing fees, premiums, legal and consulting costs related to the 2010 Senior Credit Facility entered into on March 1, 2010 which were expensed in accordance with accounting guidance for debtors accounting for a modification or exchange of debt instruments. The Company did not incur similar financing expenses in 2011.Items

~~Depreciation~~Non-operating ~~and~~expenses ~~amortization expense~~ of $1638.53 million infor ~~2011~~2012 decreased $21.08 million ~~from~~compared ~~the~~to ~~prior~~2011 ~~year primarily~~ due to ~~reduced~~a ~~capital~~$1.7 ~~expenditures~~million decrease in ~~prior~~net ~~years~~interest expense, and ~~completed~~an ~~amortization~~incremental $0.5 million gain on sale of ~~membership~~assets ~~software~~primarily ~~and~~due ~~amortization~~to the sale of ~~finance~~Golf ~~costs~~Card ~~associated~~Club ~~with~~and consumer shows in 2012, partially offset by the ~~2010~~sale ~~Senior~~of ~~Credit~~Powerboat ~~Facility~~Magazine ~~entered~~in ~~into~~2011 and a $0.4 million loss on ~~March 1,~~debt ~~2010~~extinguishment in 2012.

Income ~~from~~before ~~Operations~~Income Tax

Income from operations before income tax for ~~2011~~2012 ~~totaled~~was $459.37 million, compared to approximately $275.82 million for ~~2010~~2011. This $174.5 million increase was ~~primarily~~attributable to the ~~result of decreased financing expense of~~ $142.47 million, ~~decreased~~increase ~~deferred~~in ~~executive~~income ~~compensation~~from ~~expense of $3.1 million~~operations, and ~~increased~~the ~~gross~~decrease ~~profit~~in ~~for Membership Services and Retail segments of $5.2 million and $1.9 million, respectively. These favorable changes were partially offset by increased other~~ non-operating ~~expenses~~items of $~~5.3 million and reduced gross profit of $~~1.8 million ~~for~~discussed ~~the Media Segment~~above.

~~Non-Operating~~Income ~~Items~~Tax Expense

~~Non-operating~~The ~~expenses~~Company ofrecorded ~~$40.1~~an ~~million~~income ~~for~~tax ~~2011~~expense ~~decreased~~of $70.93 million ~~compared~~for to2012, ~~2010~~compared ~~due~~ to a $101.63 million ~~positive~~for 2011. This change inwas primarily the ~~loss/gain~~result onof ~~derivative~~a ~~instruments~~decrease ~~related~~in to the Company’s ~~interest~~taxable ~~rate swap agreements~~income, abefore ~~$2.7~~the ~~million~~use ~~loss on extinguishment~~ of ~~the~~net ~~2010~~operating ~~Senior~~loss ~~Credit~~carryforwards, ~~Facility~~ and the ~~GSE~~recognition ~~Senior Notes in 2010, and a $0.6 million gain on sale~~ of ~~assets~~the inrelated ~~2011,~~current ~~primarily~~tax ~~media~~expense ~~businesses, partially offset by a $6.0 million increase~~ in ~~interest~~2012 ~~expense~~and ~~relating~~2011 tofor ~~the~~federal ~~higher~~alternative ~~incremental~~minimum ~~interest~~tax ~~rate~~and onstate ~~the~~income ~~Company’s debt in 2011~~taxes.

~~Income~~Net ~~(loss) before~~ Income ~~Tax~~

~~Income~~Net ~~from operations before~~ income ~~tax~~ for ~~2011~~2012 was $59.24 million, compared to a ~~loss of~~ $~~20.~~3.9 million for ~~2010. This~~2011 ~~$25.4~~mainly ~~million~~due ~~favorable change was attributable~~ to the ~~$17.5~~reasons ~~million increase in income from operations, and the decrease in non-operating items of $7.9 million~~ discussed above.

3229

~~Income~~Segment ~~Tax (Expense) Benefit~~Profit

The Company’s ~~recorded~~three anprincipal ~~income~~lines ~~tax~~of ~~expense~~business ofare $1Membership Services, Retail, and Membership Services - Media.3 The ~~million~~Membership ~~for~~Services ~~2011~~segment currently operates the Good Sam Club, ~~compared~~the Coast to aCoast ~~benefit~~Club ofand ~~$1.5~~assorted ~~million~~membership products and services for ~~2010~~RV owners, campers and outdoor vacationers. ~~This~~The ~~change~~Golf ~~was~~Card ~~primarily~~Club ~~the~~was ~~result~~sold ofin ~~the~~March 2012. The ~~Company’s~~Retail ~~recognition~~segment ofsells ~~current~~specialty ~~tax~~retail ~~expense~~merchandise inand ~~2011~~services for ~~federal~~RV ~~alternative~~owners ~~minimum~~primarily ~~tax~~through Camping World retail supercenters and ~~state~~mail ~~income~~order ~~taxes,~~catalogs. The ~~the~~Membership ~~recognition~~Services - Media segment publishes a variety of ~~tax~~publications ~~benefit~~for inselected ~~2010~~markets ~~from~~in ~~previously~~the ~~unrecognized~~recreation ~~tax~~and ~~benefits~~leisure industry, asincluding ~~well~~general ascirculation ~~reversal~~periodicals, ofdirectories, ~~accrued~~and ~~interest~~RV and ~~penalties~~powersports ~~related~~industry totrade ~~unrecognized~~magazines. In ~~tax~~addition, ~~benefits~~the Membership Services - Media segment operates consumer outdoor recreation shows primarily focused on RV and apowersports ~~decrease~~markets. The inCompany ~~the~~evaluates ~~valuation~~performance ~~allowance~~based ~~against~~on ~~deferred~~profit ~~tax~~or ~~assets~~loss infrom ~~2010~~operations before income taxes and unusual items.

~~Net~~The ~~Income~~reportable ~~(Loss)~~segments are strategic business units that offer different products and services. They are managed separately because each business requires different technology, management expertise and marketing strategies.

~~Net~~Membership ~~income~~Services segment profit of $59.6 million for 2012 increased $1.2 million, or 2.0%, from the comparable period in 2011. This increase was attributable to a $32.92 million ~~compared~~segment profit increase from the Good Sam Club primarily due to cost savings resulting from merging the President’s Club into the Good Sam Club on January 1, 2012, a ~~net~~$1.1 ~~loss~~million ofreduction in overhead costs, a $181.0 million profit increase from extended warranty program products, an $0.8 million ~~for~~increase ~~2010~~from ~~mainly~~health ~~due~~insurance and credit card products, a $0.7 million decrease in other club costs, a $0.5 million increase from the Coast to Coast Club, and a $0.5 million gain on sale of Golf Card Club. These segment profit increases were partially offset by a $2.3 million decrease in segment profit from vehicle insurance products, $2.2 million decrease from the ~~reasons~~roadside ~~discussed~~assistance ~~above~~programs due to increases in marketing expenses and claims costs, and a $1.1 million decrease in segment profit from member events.

~~Segment~~Retail ~~Profit~~segment ~~(Loss)~~loss of $0.3 million for 2012 decreased from a segment profit of $2.2 million in 2011. This reduction in segment profit of approximately $2.4 million was the result of a $10.2 million increase in selling, general and administrative expenses and a $0.3 million increase in interest expense from 2011, partially offset by a $7.0 million increase in gross profit margin, and a $1.1 million reduction in depreciation and amortization expense.

~~The Company’s three principal lines of business are~~ Membership Services, – Media ~~and Retail. The Membership Services~~ segment ~~operates~~profit ~~the~~of ~~Good~~$7.3 ~~Sam~~million ~~Club,~~for ~~the~~2012 ~~Coast~~increased to$2.5 ~~Coast Club~~million, ~~the~~or ~~President’s Club~~52.3%, ~~the~~from ~~Camp~~2011. This ~~Club~~increase ~~USA~~was ~~and~~due ~~assorted~~to ~~membership~~a ~~products~~$1.2 ~~and~~million ~~services~~increase ~~for~~in ~~RV owners, campers and outdoor vacationers, and the Golf Card Club for golf enthusiasts. The Media~~ segment ~~publishes~~profit afrom ~~variety of publications for selected markets in~~ the ~~recreation~~annual ~~and~~directories ~~leisure~~primarily ~~industry,~~due ~~including~~to ~~general~~combining ~~circulation periodicals,~~ directories, and RVreduced ~~and~~direct ~~powersports~~mail ~~industry~~quantities, ~~trade~~an ~~magazines~~$0. In8 ~~addition,~~million ~~the~~increase ~~Media~~in segment ~~operates~~profit ~~consumer~~from ~~outdoor~~the ~~recreation~~sale ~~shows~~or ~~primarily~~closure ~~focused~~of onnon-core RVmedia ~~and~~businesses ~~powersports~~in ~~markets~~2011, $0. ~~The~~6 ~~Retail~~million ~~segment~~of ~~sells~~reduced ~~specialty~~overhead ~~retail~~costs, ~~merchandise~~ and ~~services~~a ~~for~~$0.6 RVmillion ~~owners~~increase ~~primarily~~in ~~through~~segment ~~retail~~profit ~~supercenters~~from ~~and~~the ~~mail~~consumer ~~order~~shows ~~catalogs. The~~group, ~~Company~~partially ~~evaluates~~offset ~~performance~~by ~~based~~decreased onsegment profit orof ~~loss~~$0.7 million from ~~operations~~the ~~before~~outdoor ~~income~~powersports ~~taxes and unusual items~~publications.

~~The~~Year ~~reportable~~Ended ~~segments~~December 31, ~~are~~2011 ~~strategic~~compared ~~business~~with ~~units~~Year ~~that~~Ended ~~offer different products and services. They are managed separately because each business required different technology~~December 31, ~~management expertise and marketing strategies.~~2010

Membership services segment profit of $58.4 million for 2011 increased $4.5 million, or 8.4%, from the comparable period in 2010. This increase was largely attributable to a $4.2 million increase in segment profit from emergency road services programs, $2.8 million of incremental license fees received from FreedomRoads, and a $2.1 million increase in segment profit from the extended vehicle warranty programs. These increases were partially offset by a $3.4 million reduction in vehicle insurance program profit primarily relating to the $2.5 million fee received in 2010 as a result of waiving our right of first refusal regarding the sale of the third party partner, a $0.6 million profit reduction in the Coast and Golf Card Clubs relating to reduced membership, and a $0.6 million reduction in member events segment profit.Revenues

~~Media~~Revenues ~~segment profit~~ of $4481.84 million for 2011 ~~decreased~~increased by $010.27 million, or 4.2.3%, from 2010. This decrease was due to $0.6 million of reduced segment profit in the RV magazine group primarily related to severance costs, and $0.5 million of reduced segment profit in the annual directories, partially offset by increased segment profit from the consumer shows group of $0.9 million.

~~Retail~~Membership ~~segment~~Services ~~profit~~revenues for 2011 of $2147.28 million ~~for~~increased ~~2011 decreased~~ $01.75 million, or 251.70%, from 2010. This ~~decrease~~revenue increase was ~~the~~largely ~~result~~attributable ofto a $4.93 million increase in ~~selling,~~extended ~~general~~vehicle ~~and~~warranty ~~administrative~~program ~~expenses~~revenue, ~~partially~~due ~~offset~~to byan aincrease ~~$1.1 million reduction~~ in ~~depreciation~~the ~~and~~average ~~amortization~~price ~~expense~~per contract, and a $2.78 million increase in ~~gross~~license ~~profit~~fees ~~margin,~~received ~~and~~from FreedomRoads. These increases were partially offset by a $03.4 million ~~reduction~~decrease in ~~financing~~vehicle ~~expense~~insurance program revenue primarily from ~~2010~~the $2.5 million fee received in 2010 as a

3330

~~Year~~result ~~Ended~~of ~~December 31~~waiving our right of first refusal regarding the sale of the third party provider of vehicle insurance, ~~2010~~a ~~compared~~$1.0 ~~with~~million ~~Year~~reduction ~~Ended~~in ~~December 31~~dealer program marketing revenue, ~~2009~~a $0.8 million revenue reduction from the Coast to Coast Club and Golf Card Club primarily attributable to decreased membership, and a $0.4 million reduction in member events revenue.

~~Revenues~~Retail revenues of $282.4 million for 2011 increased $11.8 million, or 4.4%, from 2010. Store merchandise sales decreased $0.7 million from 2010 due to a same store sales decrease of $2.1 million, or 1.1%, (compared to a 0.5% decrease in same store sales for 2010 versus 2009), and decreased revenue from discontinued stores of $1.4 million, partially offset by a $2.8 million revenue increase from the opening of six new stores during 2011 and 2010. Two stores were closed in 2011 and 2010 in order to reduce fixed operating costs and to consolidate operations within the respective trade areas. Same store sale calculations for a given period include only those stores that were open both at the end of that period and at the beginning of the preceding fiscal year. Also, mail order and internet sales increased $10.6 million, supplies and other sales increased $1.8 million, and installation and service fees increased $0.1 million.

~~Revenues~~Membership Services - Media revenues of $~~470~~51.72 million for 2011 decreased $2.6 million, or 4.9%, from 2010. This decrease was primarily attributable to a $3.5 million revenue reduction related to the sale of five publication businesses in 2011 (RV Business magazine in March 2011, Powerboat magazine in May 2011, Trailer Boats magazine in May 2011, guest services campground guides in June 2011, and ATV Magazine in October 2011). In addition, two fewer issues of motorcycle magazines were published in 2011, resulting in reduced revenue of $0.4 million, and other conferences and internet revenue decreased by $10.4 million. These decreases were partially offset by a $1.2 million increase in corporate sponsorships in the consumer shows group, orand a $0.~~2%,~~5 ~~from~~million ~~2009~~increase in annual directory revenue.

~~Membership~~Costs ~~Services~~Applicable ~~revenues for 2010 of $146.3 million increased $4.1 million, or 2.9%, from 2009. This revenue increase was largely attributable~~ to an incremental $1.5 million fee received in the first quarter of 2010 related to vehicle insurance products as a result of our waiving our right of first refusal regarding the sale of the vehicle insurance business by a third party provider, a $1.2 million increase in extended vehicle warranty program revenue resulting from continued policy growth, a $0.9 million license fee from FreedomRoads agreed upon in the Second Amended and Restated Cooperative Resources Agreement dated October 2010 which provides for, among other items, an annual license fee of $3.75 million paid in quarterly installments, an $0.8 million increase in marketing fee revenue from health and life insurance products, a $0.6 million increase in member events revenue, a $0.6 million increase in emergency road service revenue primarily due to a price increase, and a $0.4 million revenue increase in credit card royalties. These increases were partially offset by a $1.2 million revenue decrease related to reduced enrollment in the Coast to Coast Club and the Golf Card Club and a $0.7 million reduction in marketing fees from the vehicle insurance business.Revenues

~~Media~~Costs applicable to revenues oftotaled $53288.8 million, ~~for~~an ~~2010~~increase ~~decreased~~of $5.24 million, or 81.89%, from ~~2009. This~~the ~~decrease~~comparable ~~was~~period ~~primarily attributable to a $3.8 million reduction~~ in ~~revenue from our outdoor power sports magazines. Anticipated declining advertising revenues resulted in management reducing total power sports issues published by nineteen issues in~~ 2010 ~~versus 2009~~. Declining exhibitor revenue commitments resulted in management canceling ten consumer shows, resulting in a $1.3 million reduction in exhibitor revenue in 2010 compared to 2009. In addition, advertising and circulation revenue decreased $0.6 million for the RV magazine group, and annual directory revenue decreased $0.3 million. These decreases were partially offset by an $0.8 million increase in revenue from outdoor power sports conferences and online ad sales.

~~Retail~~Membership Services costs applicable to revenues of $~~270~~81.65 million ~~for 2010 remained unchanged from 2009. Store merchandise sales~~ decreased $3.87 million ~~from 2009 due to a same store sales decrease of $1.0 million~~, or 04.53%, ~~compared~~from to2010. This decrease consisted of a $4.5%7 million decrease in ~~same~~roadside ~~store~~assistance ~~sales~~costs ~~for~~primarily ~~2009,~~due ~~and~~to ~~decreased~~lower ~~revenue~~average ~~from~~claim ~~discontinued~~costs, ~~stores~~a of $20.9 million, ~~were~~reduction ~~partially~~the ~~offset~~dealer byprogram marketing, a $0.17 million ~~revenue~~reduction ~~increase~~in ~~from~~other ~~the~~ancillary ~~opening~~product ofcosts, ~~four~~a ~~new~~$0.4 ~~stores~~million ~~over~~reduction ~~the past twenty-four months Three stores were closed~~ in ~~the~~overhead ~~last twenty-four months in order to reduce fixed operating~~ costs, and toa ~~consolidate~~net ~~operations within the respective trade areas~~$0. ~~Same~~2 ~~store~~million ~~sale~~reduction ~~calculations~~in ~~for~~wage-related acosts ~~given~~($0.7 ~~period~~million ~~include~~of ~~only~~wage ~~those~~savings ~~stores~~partially ~~that~~offset ~~were~~by ~~open~~$0.5 ~~both~~million atof ~~the~~severance ~~end~~expense), ofpartially ~~that~~offset ~~period~~by ~~and~~a at$2.2 ~~the~~million ~~beginning~~increase ofin ~~the~~extended ~~preceding~~vehicle ~~fiscal~~warranty ~~year. Also,~~program ~~installation~~costs ~~and~~relating ~~service~~to ~~fees~~ increased ~~$1.7~~revenue ~~million,~~from ~~mail~~those ~~order~~programs, and ~~internet~~incremental ~~sales~~Good ~~increased~~Sam ~~$1.1~~Club ~~million,~~sponsorship ~~and~~fees ~~supplies~~ and ~~other~~member ~~sales~~publication ~~increased~~costs of $1.0 million.

~~Costs~~Retail ~~Applicable~~costs applicable to ~~Revenues~~revenues increased $9.9 million, or 6.3%, to $167.4 million. The retail gross profit margin of 40.7% for 2011 decreased from 41.8% for 2010 primarily due to an increase in merchandise markdowns in order to drive increased retail traffic to provide greater opportunity to sell Good Sam memberships and other membership services to customers at retail stores.

~~Costs~~Membership Services - Media costs applicable to revenues ~~totaled~~of $~~283~~39.48 million, afor ~~decrease~~2011 ofdecreased $~~12.~~0.8 million, or 4.1.9%, from 2010 due to a $1.7 million expense reduction from the ~~comparable~~sale ~~period~~of five publication businesses in ~~2009~~2011, and a net $0.5 million reduction in wage-related costs (consisting of $1.1 million in wage savings partially offset by $0.6 million of severance expense), partially offset by a $0.9 million increase in annual directory costs and $0.5 million of incremental promotional costs related to the book division.

Membership Services costs applicable to revenues of $85.2 million increased $0.4 million, or 0.5%, from 2009. This increase consisted of a $1.3 million increase in costs associated with the extended vehicle warranty program, a $0.5 million increase in vehicle insurance marketing costs and a $0.3 million increase in emergency road services costs, all related to increased revenue, partially offset by a $1.0 million reduction in marketing and program costs related to reduced membership in the Coast to Coast Club and the Golf Card Club, and a $0.7 million reduction in wage-related expenses due to a reduction in personnel.31

34Operating Expenses

~~Media~~Selling, ~~costs~~general ~~applicable~~and toadministrative ~~revenues~~expenses of $40130.68 million for ~~2010~~2011 ~~decreased~~increased $54.53 million, orcompared 11to 2010.~~9%,~~ This ~~from~~increase ~~2009~~was ~~primarily~~due ~~related~~ to a $45.30 million ~~reduction~~increase in ~~magazine~~retail selling, general and administrative expenses, ~~resulting~~primarily ~~from~~related ~~reduced~~to ~~issues~~increased ~~published~~advertising and ~~reduced~~other ~~magazine~~selling ~~sizes~~expenses, a $1.2.0 million ~~reduction~~of inincremental ~~costs~~ wage-related toexpense, ~~reduced~~consisting ~~consumer~~of ~~shows~~$1.2 ~~revenue~~million ~~related to the reduced number~~ of ~~shows~~severance and $0.58 million ~~reduction~~of inother ~~annual~~wage-related ~~directory~~expense, ~~costs. These~~and ~~reductions were taken as~~ a ~~cost~~$1.0 ~~saving~~million ~~strategy~~reimbursement ~~because~~of ~~expected~~legal ~~revenues~~expenses ~~from~~in ~~these~~2010 ~~products~~related ~~were~~to ~~not~~the ~~anticipated~~collection toof ~~cover~~a ~~expected~~prior ~~costs~~favorable judgment. These ~~decreases~~increases were partially offset by a $03.51 million ~~increase~~decrease in ~~costs~~deferred ~~associated~~executive ~~with~~compensation ~~increased~~under ~~revenue~~the ~~from~~deferred ~~outdoor~~compensation ~~power~~agreements, ~~sports~~and ~~conferences~~a $0.6 million decrease in professional fees.

~~Retail~~Financing ~~costs~~expense ~~applicable~~of ~~to revenues decreased~~ $614.94 million, orwas ~~4.2%~~incurred in 2010 primarily for closing fees, topremiums, ~~$157.6~~legal ~~million~~and ~~due~~consulting tocosts ~~improved~~related ~~gross~~to ~~margin. The~~the ~~retail~~2010 ~~gross~~Senior ~~profit~~Credit ~~margin~~Facility ofentered ~~41.8%~~into ~~for~~on March 1, 2010 ~~increased~~which ~~from~~were ~~39.2%~~expensed in accordance with accounting guidance for ~~2009~~debtors ~~primarily~~accounting ~~due~~for toa ~~price~~modification ~~increases~~or onexchange ~~select~~of ~~high~~debt ~~volume~~instruments. The ~~products~~Company did not incur similar financing expenses in 2011.

~~Operating~~Depreciation ~~Expenses~~and amortization expense of $16.5 million in 2011 decreased $2.0 million from the prior year primarily due to reduced capital expenditures in prior years, and completed amortization of membership software and amortization of finance costs associated with the 2010 Senior Credit Facility entered into on March 1, 2010.

~~Selling,~~Income ~~general~~from and administrative expenses of $126.6 million for 2010 decreased $2.3 million compared to 2009. This decrease was due a $3.1 million decrease in retail general and administrative expenses consisting primarily of decreases in labor and advertising expense, a $1.8 million reduction in professional fees and a $1.0 million reimbursement of legal expenses related to the collection of a prior year favorable judgment for such expenses that was lien on real estate owned by the obligor that was received in the third quarter. These decreases were partially offset by a $3.1 million increase in deferred executive compensation under the 2010 Phantom Stock agreements and $0.5 million annual general and administrative support fee paid to the Company’s ultimate parent.Operations

~~The~~Income ~~Company~~from ~~recorded~~operations afor ~~non-cash~~2011 ~~goodwill~~totaled ~~impairment~~$45.3 ~~charge~~million ofcompared to $4627.98 million infor 2010. This $17.5 million increase was primarily the ~~third~~result ~~quarter~~of decreased financing expense of ~~2009~~$14.4 ~~related~~million, todecreased ~~our~~deferred RVexecutive ~~and~~compensation ~~powersports~~expense ~~publications~~of $3.1 million, ~~which~~and isincreased ~~part~~gross profit for Membership Services and Retail segments of ~~the~~$5.2 ~~Media~~million ~~segment~~and $1.9 million, respectively. NoThese ~~impairment~~favorable ~~charges~~changes were ~~recorded~~partially inoffset ~~2010~~by increased other operating expenses of $5.3 million and reduced gross profit of $1.8 million for the Membership Services - Media segment.

~~Financing~~Non-Operating expense of $14.4 million was incurred in 2010 primarily for closing fees, premiums, legal and consulting costs related to the 2010 Senior Credit Facility entered into on March 1, 2010 which were expensed in accordance with accounting guidance for debtors accounting for a modification or exchange of debt instruments. Financing expense of $2.6 million for 2009 related to legal and other costs incurred associated with the amendment dated June 5, 2009 to the then senior credit facility.Items

~~Depreciation~~Non-operating ~~and~~expenses ~~amortization expense~~ of $1840.51 million for 2011 decreased $27.59 million ~~from~~compared to 2010 due to a $10.6 million positive change in the ~~prior~~loss/gain ~~year~~on ~~primarily~~derivative ~~due~~instruments related to ~~completed~~the ~~amortization~~interest rate swap agreements, a $2.7 million loss on extinguishment of ~~intangible~~the ~~assets~~2010 ~~associated~~Senior ~~with~~Credit ~~prior~~Facility ~~acquisitions~~and the GSE Senior Notes in 2010, and ~~the~~a ~~reduced~~$0.6 ~~level~~million gain on sale of ~~capital~~assets ~~expenditures~~in ~~since~~2011, ~~2008~~primarily media businesses, partially offset by a $6.0 million increase in interest expense relating to the higher incremental interest rate on the Company’s debt in 2011.

Income (~~Loss~~loss) ~~from~~before ~~Operations~~Income Tax

Income from operations before income tax for ~~2010~~2011 ~~totaled~~was $275.82 million, compared to a loss ~~from operation~~ of $2320.13 million for ~~2009~~2010. This $5025.94 million favorable change was ~~primarily~~attributable ~~the~~to ~~result~~ the $4617.95 million ~~goodwill~~increase ~~impairment charge~~ in ~~the~~income ~~third~~from ~~quarter of 2009. In addition~~operations, and the ~~following~~decrease ~~favorable changes were experienced~~ in ~~2010~~non-operating ~~compared~~items ~~to 2009: increased gross profit for the Retail, Membership Services and Media segments~~ of $67.9 million, ~~$3.7~~discussed ~~million, and $0~~above.3 million, respectively; and reduced operating expenses of $8.0 million. These favorable changes were only partially offset by increased financing expense of $11.8 million, and a $3.1 million increase in deferred executive compensation in 2010.

~~Non-Operating~~Income ~~Items~~Tax (Expense) Benefit

~~Non-operating~~The ~~expenses~~Company ofrecorded ~~approximately $48.1 million for 2010 increased $21.9 million compared to 2009 due to~~ an ~~$8.4~~income ~~million~~tax ~~increase in net interest~~ expense ~~relating~~of ~~to higher interest rates and increased debt, a~~ $71.43 million ~~negative~~for ~~change in the loss/gain on derivative instruments related to the interest rate swap agreements~~2011, acompared ~~$7.4 million negative change in the loss/gain related~~ to ~~debt restructurings resulting from~~ a ~~$2.7~~benefit ~~million loss on extinguishment~~ of ~~the 2010 Senior Credit Facility and the GSE Senior Notes in 2010, and the~~ $41.75 million ~~gain~~for ~~on purchase of the $14~~2010.6 This ~~million~~change ~~GSE~~was ~~Senior~~primarily ~~Notes in~~ the ~~second~~result ~~quarter~~ of ~~2009. The~~the Company’s ~~replaced~~recognition ~~its~~of ~~variable~~current ~~debt~~tax ~~with~~expense ~~fixed debt~~ in ~~November 2010~~2011 ~~and~~for ~~the~~federal ~~amounts~~alternative ~~included~~minimum intax ~~Other~~and ~~Comprehensive~~state ~~Income~~income ~~were~~taxes, ~~reclassed to~~ the ~~income~~recognition ~~statement~~of astax ~~the~~benefit ~~interest~~in ~~rate~~2010 ~~swaps~~from nopreviously ~~longer~~unrecognized ~~qualify~~tax benefits, as ~~cash~~well ~~flow hedges~~ as ~~the~~reversal ~~underlying~~of ~~cash~~accrued ~~flows~~interest ~~being~~and ~~hedged~~penalties ~~were~~related ~~no longer going~~ to ~~occur. These~~unrecognized ~~increases~~tax ~~were~~benefits ~~partially~~and ~~offset by~~ a ~~$0.7 million~~ decrease in ~~other~~the ~~non-operating~~valuation ~~expenses~~allowance ~~and~~against adeferred ~~$0.6~~tax ~~million loss on sale of retail~~ assets in ~~2009~~2010.

35Net Income (Loss)

~~Loss~~Net ~~before~~income ~~Income~~for ~~Tax~~2011 was $3.9 million compared to a net loss of $18.8 million for 2010 mainly due to the reasons discussed above.

Loss before income tax for 2010 was $20.3 million, compared to a loss of $49.3 million for 2009. This $29.0 million favorable change was attributable to the $50.9 million increase in income from operations, partially offset by the increase in non-operating items mentioned above of approximately $21.9 million.32

~~Income~~Segment ~~Tax~~Profit ~~Benefit~~(Loss)

The Company’s ~~recorded~~three anprincipal ~~income~~lines ~~tax~~of ~~benefit~~business ofare $1Membership Services, Retail, and Membership Services - Media.5 The ~~million~~Membership ~~for~~Services ~~2010~~segment operated the Good Sam Club, ~~compared~~the Coast to ~~$10.4~~Coast ~~million~~Club, the President’s Club, the Camp Club USA and assorted membership products and services for ~~2009~~RV owners, campers and outdoor vacationers, and the Golf Card Club for golf enthusiasts. ~~This~~The ~~change~~Retail ~~was~~segment ~~the~~sells ~~result~~specialty ofretail amerchandise ~~favorable~~and ~~change~~services infor ~~loss~~RV ~~before~~owners ~~income~~primarily ~~tax~~through ~~discussed~~retail ~~above~~supercenters asand ~~well~~mail asorder catalogs. The Membership Services - Media segment publishes a ~~reversal~~variety of ~~unrecognized~~publications ~~tax~~for ~~benefits,~~selected ~~reversal~~markets ofin ~~accrued~~the ~~interest~~recreation and ~~penalties~~leisure ~~related~~industry, toincluding ~~unrecognized~~general ~~tax~~circulation ~~benefits~~periodicals, directories, and aRV ~~decrease~~and inpowersports industry trade magazines. In addition, the ~~valuation~~Membership ~~allowance~~Services ~~against~~- ~~deferred~~Media ~~tax~~segment ~~assets~~operates inconsumer ~~2010~~outdoor recreation shows primarily focused on RV and powersports markets. The Company evaluates performance based on profit or loss from operations before income taxes and unusual items.

~~Net~~The ~~loss~~reportable segments are strategic business units that offer different products and services. They are managed separately because each business required different technology, management expertise and marketing strategies.

~~Net~~Membership ~~loss~~services segment profit of $58.4 million for 2011 increased $4.5 million, or 8.4%, from the comparable period in 2010. This increase was largely attributable to a $184.2 million increase in segment profit from roadside assistance programs, $2.8 million ~~compared~~of incremental license fees received from FreedomRoads, and a $2.1 million increase in segment profit from the extended vehicle warranty programs. These increases were partially offset by a $3.4 million reduction in vehicle insurance program profit primarily relating to the $2.5 million fee received in 2010 as a ~~loss~~result of waiving our right of first refusal regarding the sale of a third party partner, a $380.96 million ~~for~~profit ~~2009~~reduction ~~mainly~~in ~~due~~the Coast and Golf Card Clubs relating to ~~the~~reduced ~~reasons~~membership, ~~discussed~~and ~~above~~a $0.6 million reduction in member events segment profit.

~~Segment~~Retail ~~Profit~~segment ~~(Loss)~~profit of $2.2 million for 2011 decreased $0.7 million, or 25.7%, from 2010. This decrease was the result of a $4.9 million increase in selling, general and administrative expenses, partially offset by a $1.1 million reduction in depreciation and amortization expense, a $2.7 million increase in gross profit margin, and a $0.4 million reduction in financing expense from 2010.

~~The Company’s three principal lines of business are~~ Membership Services, - Media ~~and Retail. The Membership Services~~ segment ~~operates~~profit ~~the~~of ~~Good~~$4.8 ~~Sam~~million ~~Club,~~for ~~the~~2011 ~~Coast~~decreased to$0.2 ~~Coast Club~~million, ~~the~~or ~~President’s Club~~4.2%, ~~the~~from ~~Camp Club USA and assorted membership products and services for RV owners, campers and outdoor vacationers, and the Golf Card Club for golf enthusiasts~~2010. ~~The~~This ~~Media~~decrease ~~segment~~was ~~publishes~~due ato ~~variety~~$0.6 million of ~~publications~~reduced ~~for~~segment ~~selected~~profit ~~markets~~ in the ~~recreation~~RV ~~and~~magazine ~~leisure~~group ~~industry,~~primarily ~~including~~related ~~general~~to ~~circulation~~severance ~~periodicals~~costs, ~~directories,~~ and ~~RV and powersports industry trade magazines~~$0. In5 ~~addition,~~million ~~the~~of ~~Media~~reduced segment ~~operates~~profit ~~consumer~~in ~~outdoor~~the ~~recreation~~annual ~~shows~~directories, ~~primarily~~partially ~~focused~~offset onby RVincreased ~~and powersports markets. The Retail~~ segment ~~sells specialty retail merchandise and services for RV owners primarily through retail supercenters, mail order catalogs and the internet. The Company evaluates performance based on~~ profit ~~or loss~~ from ~~operations~~the ~~before~~consumer ~~income~~shows ~~taxes~~group ~~and~~of ~~unusual~~$0.9 ~~items~~million.

~~The~~Liquidity ~~reportable segments are strategic business units that offer different products~~ and ~~services. They~~Capital ~~are managed separately because each business required different technology, management expertise and marketing strategies.~~Resources

~~Membership~~We ~~services~~had ~~segment~~working ~~profit~~capital of $5316.92 million, ~~for~~$5.6 ~~2010~~million ~~increased~~and $610.26 million, ~~or 13.1%~~respectively, ~~from~~as ~~the~~of ~~comparable~~December 31, ~~period~~2012, in2011 ~~2009~~and 2010. ~~This~~The ~~increase~~primary ~~was~~reason ~~largely~~for ~~attributable~~the tolow alevels ~~$1.4~~of ~~million~~working ~~increase~~capital inis ~~segment profit in~~ the ~~Good~~deferred ~~Sam~~revenue ~~Club related to reduced marketing~~ and ~~administrative~~gains ~~expenses,~~reported aunder ~~$1.3~~current ~~million~~liabilities ~~increase~~of ~~in profit related to reduced overhead, marketing and wage-related expenses, a~~ $054.96 million ~~increase in segment profit relating to licensing fees paid by FreedomRoads~~, a $054.9 million ~~increase in segment profit from various other club~~ and ~~ancillary product segment profit, a~~ $056.86 million ~~increase~~as inof ~~marketing~~December 31, ~~fee~~2012, ~~revenue~~2011 ~~from credit cards~~ and ~~health~~2010, ~~and~~respectively, ~~life~~which ~~insurance~~reduce ~~products,~~working ~~a $0~~capital.7 Deferred ~~million~~revenue ~~increase~~is inprimarily ~~profit~~comprised ~~related~~of tocash ~~the~~collected ~~member~~for ~~events,~~club ~~and~~memberships ~~a $0.2 million increase~~ in ~~marketing~~advance ~~fees~~of ~~related~~services to ~~vehicle~~be ~~insurance~~provided ~~primarily~~which ~~related~~is todeferred anand ~~incremental~~recognized ~~$1.5 million fee received~~ as arevenue ~~result~~over ofthe ~~waiving~~life ~~our right~~ of ~~first~~the ~~refusal~~membership. We ~~regarding~~use ~~the~~net ~~sale~~proceeds offrom ~~the~~this ~~third~~deferred ~~party~~membership ~~partner~~revenue ~~combined~~to ~~with~~lower ~~reduced~~our ~~marketing~~long-term ~~fee~~borrowings ~~revenue~~and ~~partially~~finance ~~offset~~our byworking ~~increased~~capital ~~expenses~~needs.

3633

~~Media~~Contractual ~~segment~~Obligations profit improved to $5.0 million for 2010 from a loss of $43.9 million for 2009. This $48.9 million improvement resulted primarily from the $46.9 million goodwill impairment charge in 2009 in the Media segment. In addition, the following favorable changes were experienced in 2010 from 2009: a $0.9 million increase in segment profit in the powersports magazine group, a $0.4 million increase in segment profit in the RV magazine group, a $0.3 million increase in profit for outdoor power sports conferences and ~~online~~Commercial ~~ad sales, a $0.2 million increase in segment profit from the consumer shows group, and a $0.2 million decrease in publishing overhead.~~Commitments

~~Retail~~The ~~segment~~following ~~profit~~table ~~was~~summarizes ~~$2.9~~our ~~million~~commitments ~~for 2010 compared~~ to amake ~~loss~~long-term ofdebt, ~~$11.4~~lease ~~million~~commitments, ~~for~~deferred ~~2009. This~~compensation ~~$14.3~~payable ~~million~~and ~~improvement~~letter ~~was~~of ~~the~~credit ~~result~~commitments ofat aDecember 31, $52012.5 This ~~million~~table ~~decrease~~includes inprincipal ~~allocated~~and future interest ~~expense~~ due tounder ~~lower~~our ~~borrowings,~~debt aagreements ~~$5.1~~based ~~million~~on ~~increase~~interest inrates ~~gross~~as ~~profit~~of ~~margin~~December 31, a2012 ~~$3.1 million decrease in selling, general~~ and ~~administrative~~assumes ~~expenses,~~debt ~~and~~obligations awill ~~$0.6~~be ~~million~~held ofto ~~loss on sale of assets in 2009~~maturity.

Liquidity and Capital Resources

	Payments Due by Period (in thousands)
	Total	2013	2014	2015	2016	2017	Thereafter

Debt and future interest	$ 478,887	$ 47,325	$ 57,910	$ 44,614	$ 329,038	$ -	$ -
Operating lease obligations	224,510	23,938	22,985	21,564	18,432	15,652	121,939
Deferred compensation	1,264	1,021	243	-	-	-	-
Standby letters of credit	5,286	5,286	-	-	-	-	-

Grand total	$ 709,947	$ 77,570	$ 81,138	$ 66,178	$ 347,470	$ 15,652	$ 121,939

~~We had working capital of $5~~11.650% ~~million~~Senior ~~and~~Secured ~~$10.6~~Notes ~~million,~~due respectively, as of December 31, 2011 and December 31, 2010. The primary reason for the low levels of working capital is the deferred revenue and gains reported under current liabilities of $54.9 million and $56.6 million as of December 31, 2011 and 2010, respectively, which reduce working capital. Deferred revenue is primarily comprised of cash collected for club memberships in advance of services to be provided which is deferred and recognized as revenue over the life of the membership. We use net proceeds from this deferred membership revenue to lower our long-term borrowings and finance our working capital needs.2016

~~Contractual~~On ~~Obligations~~November 30, 2010, the Company issued $333.0 million of 11.5% senior secured notes due 2016 (the “Senior Secured Notes”) at an original issue discount of 2.1%. Interest on the Senior Secured Notes is due each December 1 and ~~Commercial~~June 1 ~~Commitments~~commencing June 1, 2011. The Senior Secured Notes mature on December 1, 2016. The Company used the net proceeds of $326.0 million from the issuance of the Senior Secured Notes: (i) to irrevocably redeem or otherwise retire all of our outstanding 9% senior subordinated notes due 2012 (the “GSE Senior Notes”) in an approximate amount (including accrued interest through but not including November 30, 2010) of $142.5 million; (ii) to permanently repay all of the outstanding indebtedness under our then senior secured credit facility (the “2010 Senior Credit Facility”) in an approximate amount (including call premium and accrued interest through but not including November 30, 2010) of $153.4 million; (iii) to make a $19.6 million distribution to our direct parent, Affinity Group Holding, LLC, (“Parent”), to enable Parent, together with other funds contributed to the Parent, to redeem, repurchase or otherwise acquire for value and satisfy and discharge all of its outstanding 10 7/8% senior notes due 2012 (the “AGHI Notes”); and (iv) to pay related fees and expenses in connection with the foregoing transactions and to provide for general corporate purposes. As of December 31, 2012, an aggregate of $325.6 million of Senior Secured Notes remain outstanding.

The ~~following~~Senior ~~table~~Secured ~~summarizes~~Notes ~~our~~are ~~commitments~~fully toand ~~make~~unconditionally ~~long-term debt~~guaranteed, ~~lease~~jointly and severally, ~~deferred~~on ~~compensation~~a senior secured basis by each of the Company’s existing and ~~letter~~future domestic restricted subsidiaries. All of ~~credit~~the ~~payments~~Company’s atsubsidiaries ~~December 31~~other than CWFR are designated as restricted subsidiaries, ~~2011~~and CWFR constitutes our only “unrestricted subsidiary”. ~~This~~In ~~table~~the ~~includes~~event ~~principal~~of a bankruptcy, liquidation or reorganization of an unrestricted subsidiary, holders of the indebtedness of an unrestricted subsidiary and ~~future~~their ~~interest~~trade ~~due~~creditors ~~under~~are ~~our~~generally ~~debt~~entitled ~~agreements~~to ~~based~~payment onof ~~interest~~their ~~rates~~claims asfrom the assets of ~~December 31~~an unrestricted subsidiary before any assets are made available for distribution to us. As a result, ~~2011~~with ~~and~~respect ~~assumes~~to ~~debt~~assets ~~obligations~~of ~~will~~unrestricted besubsidiaries, ~~held~~the Senior Secured Notes are structurally subordinated to ~~maturity~~the prior payment of all of the debts of such unrestricted subsidiaries.

	Payments Due by Period (in thousands)
		Total		2012		2013		2014		2015		2016		Thereafter
Debt and future interest		$	524,540	$	54,866	$	46,558	$	55,808	$	43,940	$	323,368	$	-
Operating lease obligations		224,591		23,139		22,652		21,691		20,442		17,351		119,316
Deferred compensation		2,298		1,034		1,021		243		-		-		-
Other commercial commitments Letters of credit		7,091		5,081		2,010		-		-		-		-
Grand total		$	758,520	$	84,120	$	72,241	$	77,742	$	64,382	$	340,719	$	119,316

The Senior Secured Notes Indenture limits the Company’s ability to, among other things, incur more debt, pay dividends or make other distributions to the Company’s Parent, redeem stock, make certain investments, create liens, enter into transactions with affiliates, merge or consolidate, transfer or sell assets and make capital expenditures.

~~11.50~~Subject to certain conditions, the Company is required to offer to redeem Senior Secured Notes at 101% of principal amount tendered for redemption in an aggregate amount of the Excess Cash Flow Amount (as defined in the indenture governing the Senior Secured Notes ~~due~~(the ~~2016~~“Senior Secured Indenture”)) for the respective period. For the calendar year ended December 31, 2011, the Excess Cash Flow Amount

On November 30, 2010, the Company issued $333.0 million of 11.5% senior secured notes due 2016 (the “Senior Secured Notes”) at an original issue discount of 2.1%. Interest on the Senior Secured Notes is due each December 1 and June 1 commencing June 1, 2011. The Senior Secured Notes mature on December 1, 2016. The Company used the net proceeds of $326.0 million from the issuance of the Senior Secured Notes: (i) to irrevocably redeem or otherwise retire all of our outstanding 9% senior subordinated notes due 2012 (the “GSE Senior Notes”) in an approximate amount (including accrued interest through but not including November 30, 2010) of $142.5 million; (ii) to permanently repay all of the outstanding indebtedness under our then senior secured credit facility (the “2010 Senior Credit Facility”) in an approximate amount (including call premium and accrued interest through but not including November 30, 2010) of $153.4 million; (iii) to make a $19.6 million distribution to our direct parent, Affinity Group Holding, LLC, (“Parent”), to enable Parent, together with other funds contributed to the Parent, to redeem, repurchase or otherwise acquire for value and satisfy and discharge all of its outstanding 10 7/8% senior notes due 2012 (the “AGHI Notes”); and (iv) to pay related fees and expenses in connection with the foregoing transactions and to provide for general corporate purposes. As of December 31, 2011, an aggregate of $333.0 million of Senior Secured Notes remain outstanding.34

37was calculated as the greater of $7.5 million or 75% of the Excess Cash Flow (as defined in the Senior Secured Notes Indenture). For each six month period ending on June 30 beginning June 30, 2012, the minimum Excess Cash Flow Amount is $5.0 million if the then outstanding aggregate principal amount of the Senior Secured Notes exceeds $233.0 million or $1.0 million if the then outstanding aggregate principal amount of the Senior Secured Notes is $233.0 million or less (such amount called the “Minimum Excess Cash Flow”). For the calendar years commencing with the calendar year ended December 31, 2012, the Excess Cash Flow Amount is the greater of (i) the Minimum Excess Cash Flow Amount, or (ii) (x) 75% of Excess Cash Flow for such annual period, minus (y) the Minimum Excess Cash Flow Amount for the immediately preceding six months period ending on June 30.

~~The~~On ~~Senior Secured Notes are fully and unconditionally guaranteed~~February 27, ~~jointly and severally~~2012, onthe aCompany ~~senior~~completed ~~secured~~an ~~basis~~excess bycash ~~each~~flow ofoffer ~~our~~to ~~existing~~purchase ~~and~~$7.4 ~~future~~million ~~domestic~~in ~~restricted~~principal ~~subsidiaries. All~~amount of the Company’s ~~subsidiaries~~outstanding ~~other~~Senior ~~than~~Secured ~~CWFR~~Notes. The ~~Capital~~Senior ~~Corp.~~Secured ~~(“CWFR”)~~Notes ~~are~~were ~~designated~~purchased asby ~~restricted~~the ~~subsidiaries,~~Company and ~~CWFR~~retired ~~constitutes~~on ~~our~~February 27, ~~only “unrestricted subsidiary”~~2012. InOn ~~the event of a bankruptcy~~July 31, ~~liquidation or reorganization of the unrestricted subsidiary~~2012, ~~holders of~~ the ~~indebtedness~~Company ofcompleted ~~the~~an ~~unrestricted~~excess ~~subsidiary~~cash ~~and~~flow ~~their~~offer ~~trade~~to ~~creditors~~purchase ~~are~~up ~~generally entitled~~ to ~~payment~~$4.95 ofmillion ~~their~~in ~~claims~~principal ~~from~~amount ~~the assets~~ of the ~~unrestricted~~Company’s ~~subsidiary~~Senior ~~before~~Secured ~~any~~Notes ~~assets~~and ~~are~~$4,000 ~~made~~were ~~available~~tendered ~~for~~and ~~distribution~~were toretired uson August 7, 2012. AsThe aExcess ~~result,~~Cash ~~with~~Flow ~~respect~~Offer tofor ~~assets~~the ofyear ~~unrestricted~~ended ~~subsidiaries~~December 31, ~~the~~2012 ~~Senior~~is ~~Secured~~for ~~Notes~~$4.95 ~~are~~million. The ~~structurally~~offer ~~subordinated~~was presented to ~~the~~holders ~~prior~~of ~~payment~~record as of ~~all~~March 12, of2013 ~~the~~and ~~debts~~shall ofexpire ~~such~~on ~~unrestricted~~April 10, ~~subsidiaries~~2013.

The ~~indenture~~Senior ~~governing~~Secured Notes and the ~~Senior~~related ~~Secured~~guarantees ~~Notes~~are (our and the “guarantors’ senior secured obligations. The Senior Secured Notes ~~Indenture”~~(i) rank ~~limits~~senior in right of payment to all of our and the ~~Company~~guarantors’s ~~ability~~existing ~~to,~~and ~~among~~future ~~other~~subordinated ~~things~~indebtedness, ~~incur~~(ii) rank ~~more~~equal ~~debt,~~in ~~pay~~right ~~dividends~~of orpayment ~~make~~with all of our and the guarantors’ existing and future senior indebtedness other ~~distributions~~than tothe ~~our~~obligations ~~Parent,~~of ~~redeem~~Camping ~~stock,~~World ~~make~~and ~~certain~~its ~~investments,~~subsidiaries ~~create~~under ~~liens~~the credit agreement dated March 1, ~~enter~~2010 ~~into~~(“CW ~~transactions~~Credit ~~with~~Facility”) ~~affiliates,~~and ~~merge~~future orreplacements ~~consolidate~~of that facility, ~~transfer~~(iii) are orstructurally ~~sell~~subordinated ~~assets~~to all future indebtedness of our subsidiaries that are not guarantors of the Senior Secured Notes and ~~make~~(iv) are ~~capital~~effectively ~~expenditures~~subordinated to the CW Credit Facility and any future credit facilities in replacement thereof to the extent of the value of the collateral securing indebtedness under such facilities.

~~Subject~~The toCW ~~certain~~Credit conditions, we must make an offer to purchase some or all of the Senior Secured Notes with the excess cash flow offer amount (as defined in the indenture) determined for each applicable period, commencing with the annual period ending December 31, 2011, and each June 30 and December 31 thereafter, at 101% of the principal amount thereof, plus accrued and unpaid interest, if any, to the date of repurchase. On February 27, 2012, the Company completed an excess cash flow offer to purchase of $7.4 million in principal amount of the Senior Secured Notes. These Senior Secured Notes were purchased by the Company and retired on February 27, 2012.Facility

~~The~~On ~~Senior~~March 1, ~~Secured~~2010, ~~Notes~~our ~~and~~wholly-owned subsidiary, Camping World, Inc. entered into the ~~related~~CW ~~guarantees~~Credit ~~are~~Facility ~~our~~providing for an asset based lending facility of up to $22.0 million, of which $10.0 million is available for letters of credit and ~~the~~$12.0 ~~guarantors’~~million ~~senior~~is ~~secured~~available ~~obligations~~for revolving loans. The ~~Senior~~CW ~~Secured~~Credit ~~Notes~~Facility ~~(i)~~initially matured on the earlier of March ~~rank~~1, ~~senior~~2013, in60 ~~right~~days prior to the date of ~~payment~~maturity of the 2010 Senior Credit Facility, or 120 days prior to ~~all~~the earlier date of ~~our~~maturity ~~and~~of the ~~guarantors’~~Senior ~~existing~~Secured Notes and ~~future~~the ~~subordinated~~AGHI ~~indebtedness,~~Notes. Interest under the revolving loans under the CW Credit Facility floated at either 3.25% over the base rate (~~ii) rank~~defined ~~equal~~as inthe ~~right~~greater of ~~payment~~the ~~with~~prime ~~all~~rate, offederal ~~our~~funds ~~and~~rate plus 50 basis points or 1 month LIBOR) for borrowings whose interest is based on the ~~guarantors’~~prime ~~existing~~rate ~~and~~or ~~future~~3.25% ~~senior~~over ~~indebtedness~~the ~~other~~LIBOR ~~than~~rate (defined as the ~~obligations~~greater of ~~Camping~~LIBOR ~~World~~rate ~~and~~applicable ~~its~~to ~~subsidiaries~~the ~~under~~period of the ~~credit~~respective ~~agreement~~LIBOR ~~dated~~borrowings) ~~March~~for borrowings whose interest is based on LIBOR. On December 130, 2010, (“the CW Credit Facility”) was amended to extend the maturity to September 1, 2014, to decrease the interest rate margin to 2.75%, to remove the 1% LIBOR floor, to increase the revolving loan commitment amount from $12.0 million to $20.0 million, with a $5.0 million sublimit for letters of credit, and ~~future~~to ~~replacements~~decrease the letters of ~~that~~credit ~~facility~~commitment from $10.0 million to $5.0 million. On April 23, 2012, the Company amended the CW Credit Facility to (~~iii~~a) ~~are~~increase ~~structurally~~borrowing ~~subordinated~~availability by reducing the collateral availability block from $5.0 million to ~~all~~$2.5 ~~future~~million ~~indebtedness~~from October 1st of ~~our~~each ~~subsidiaries~~year ~~that~~through ~~are~~the ~~not~~last ~~guarantors~~day of February of the ~~Senior~~immediately ~~Secured~~following ~~Notes~~year, (b) eliminate any restrictions on the number of new store openings during the year, and (ivc) ~~are~~increase ~~effectively~~the ~~subordinated~~interest rate margin from 2.75% to 3.25%. On July 23, 2012, Camping World amended the CW Credit Facility ~~and~~to ~~any~~provide ~~future~~that ~~credit~~capital ~~facilities~~expenditures may be incurred in ~~replacement~~excess ~~thereof~~of to$5.0 million if during such fiscal year (a) the ~~extent~~holders of Camping World’s equity interest make a cash common equity contribution to Camping World in an amount at least equal to such excess, or (b) Camping World or their subsidiaries receive proceeds from asset sales (other than inventory sold in the ~~value~~ordinary course of ~~the~~business) ~~collateral~~in ~~securing~~an ~~indebtedness~~amount ~~under~~at least equal to such ~~facilities~~excess. As of December 31, 2012, the Company made equity contributions totaling $3.8 million to Camping World to enable additional capital expenditures above $5.0 million.

~~The CW Credit Facility~~35

OnThe ~~March 1, 2010, our wholly-owned subsidiary, Camping World, Inc. (“Camping World”) entered into the~~ CW Credit Facility ~~providing~~contains ~~for~~affirmative ancovenants, ~~asset~~including ~~based~~financial ~~lending~~covenants, ~~facility~~and ofnegative ~~up to $22~~covenants.0 Borrowings ~~million,~~under ofthe ~~which~~Camping ~~$10.0~~World ~~million~~Credit isAgreement ~~available~~are ~~for~~guaranteed ~~letters~~by ofthe ~~credit~~direct and ~~$12.0~~indirect ~~million~~subsidiaries isof ~~available~~Camping ~~for~~World ~~revolving~~and ~~loans. The~~are CWsecured ~~Credit~~by ~~Facility~~a ~~initially~~pledge ~~matured~~ on the ~~earlier~~stock of ~~March 1,~~Camping ~~2013,~~World 60and ~~days~~its ~~prior~~direct toand ~~the~~indirect ~~date~~subsidiaries ofand ~~maturity~~liens ofon the ~~2010~~assets ~~Senior~~of ~~Credit~~Camping ~~Facility,~~World orand ~~120~~its ~~days~~direct ~~prior~~and toindirect ~~the~~subsidiaries. As ~~earlier date~~ of ~~maturity~~December 31, of2012, the ~~GSE~~average ~~Senior~~interest ~~Notes~~rate ~~and~~on the ~~AGHI Notes. Interest under the revolving loans under the~~ CW Credit Facility ~~floated~~was ~~at either~~ 3.25464%. Borrowings ~~over~~under the ~~base~~CW ~~rate~~Credit ~~(defined~~Facility asare ~~the greater of the prime rate, federal funds rate plus 50 basis points or 1 month LIBOR) for borrowings whose interest is~~ based on the ~~prime~~borrowing ~~rate~~base ~~or 3.25% over the LIBOR rate (defined as the greater~~ of ~~LIBOR~~eligible ~~rate~~inventory ~~applicable~~and toaccounts ~~the~~receivable ~~period~~ of ~~the~~Camping ~~respective~~World ~~LIBOR~~and ~~borrowings)~~its ~~for borrowings whose interest is based on LIBOR~~subsidiaries. OnThe ~~December 30,~~administrative ~~2010,~~agent under the CW Credit Facility, ~~was~~the ~~amended~~collateral toagent ~~extend~~under the ~~maturity~~Senior toSecured ~~September 1,~~Notes ~~2014~~Indenture, ~~to decrease~~ the ~~interest~~Company, ~~rate~~and ~~margin~~certain toguarantor ~~2.75%,~~subsidiaries toof ~~remove~~ the 1%Company ~~LIBOR~~entered ~~floor,~~into ~~to increase~~ the ~~revolving~~Intercreditor ~~loan~~Agreement ~~commitment~~that ~~amount~~governs ~~from~~their ~~$12.0~~rights ~~million~~ to ~~$20.0~~the ~~million,~~collateral ~~with~~pledged ~~a $5.0 million sublimit for letters of credit, and~~ to ~~decrease~~secure the ~~letters~~respective ofindebtedness ~~credit commitment from $10.0 million to $5.0 million. As~~ of ~~December 31, 2011,~~ the ~~average~~Company ~~interest~~and ~~rate on~~ the CWguarantors ~~Credit~~pursuant ~~Facility~~to ~~was 3.02%. Borrowings under~~ the CW Credit Facility ~~are~~and ~~based on~~ the ~~borrowing~~Senior ~~base~~Secured ofNotes ~~eligible inventory and accounts receivable of Camping World and its subsidiaries~~Indenture. As of December 31, ~~2011~~2012, $1011.59 million of CW Credit Facility remains outstanding and $75.13 million of letters of credit were issued.

38The Senior Secured Notes Indenture and the CW Credit Facility contain certain restrictive covenants relating to, but not limited to, mergers, changes in the nature of the business, acquisitions, additional indebtedness, sale of assets, investments, and the payment of dividends subject to certain limitations and minimum operating covenants. The Company was in compliance with all debt covenants at December 31, 2012.

~~The~~On CWMarch 1, ~~Credit~~2013, ~~Facility~~the ~~contains~~Company ~~affirmative~~received ~~covenants,~~the ~~including~~requisite ~~financial~~consents ~~covenants,~~from ~~and~~noteholders ~~negative~~of ~~covenants. Borrowings~~the ~~under~~Senior ~~the~~Secured ~~Camping~~Notes ~~World~~to ~~Credit~~amend ~~Agreement~~the ~~are~~Indenture ~~guaranteed~~relating byto the ~~direct~~Senior Secured Notes outstanding and ~~indirect~~the ~~subsidiaries~~Company’s ofIntercreditor ~~Camping~~Agreement ~~World~~to ~~and~~allow ~~are~~the ~~secured~~CW byCredit aFacility ~~pledge~~to onincrease ~~the~~from ~~stock~~$25.0 ofmillion ~~Camping~~to ~~World~~$35.0 ~~and~~million. An ~~its~~aggregate ~~direct~~fee ~~and~~in ~~indirect~~the ~~subsidiaries~~amount ~~and~~of ~~liens~~$0.3 onmillion was paid to the ~~assets~~consenting ofnoteholders. Consequently, Camping World, Inc. ~~and~~amended its ~~direct~~agreement ~~and~~with ~~indirect~~the ~~subsidiaries. The~~current ~~administrative~~lender ~~agent~~of ~~under~~ the CW Credit Facility, ~~the~~to ~~collateral~~increase ~~agent under~~ the ~~Senior~~facility ~~Secured~~to ~~Notes~~$35.0 ~~Indenture~~million, reduce the ~~Company,~~interest ~~and~~rate ~~certain~~margin ~~guarantor~~to ~~subsidiaries~~2.50%, ofand extend the ~~Company~~maturity ~~have~~to ~~entered into~~ the ~~intercreditor~~earlier ~~agreement~~of ~~that~~March 1, ~~governs~~2018 ~~their~~or ~~rights~~180 todays ~~the~~prior ~~collateral pledged~~ to ~~secure~~ the ~~respective~~maturity ~~indebtedness~~ of the ~~Company~~Senior ~~and~~Secured ~~the~~Notes ~~guarantors~~or ~~pursuant~~any tonotes ~~the~~issued CWor ~~Credit~~exchanged ~~Facility~~to ~~and~~refinance the Senior Secured Notes ~~Indenture~~.

~~The~~Interest ~~Senior~~Rate ~~Secured~~Swap Notes Indenture and the CW Credit Facility contain certain restrictive covenants relating to, but not limited to, mergers, changes in the nature of the business, acquisitions, additional indebtedness, sale of assets, investments, and the payment of dividends subject to certain limitations and minimum operating covenants. We were in compliance with all debt covenants at December 31, 2011.Agreements

~~Interest~~On ~~Rate~~October 15, ~~Swap~~2007, ~~Agreements~~the Company entered into a five-year interest rate swap agreement with a notional amount of $100.0 million from which it received periodic payments at the 3 month LIBOR-based variable rate and made periodic payments at a fixed rate of 5.135%, with settlement and rate reset dates every January 31, April 30, July 31, and October 31. The interest rate swap agreement was effective beginning October 31, 2007 and expired on October 31, 2012. On March 19, 2008, the Company entered into a 4.5 year interest rate swap agreement effective April 30, 2008 with a notional amount of $35.0 million from which it received periodic payments at the 3 month LIBOR-based variable rate and made periodic payments at a fixed rate of 3.430%, with settlement and rate reset dates every January 31, April 30, July 31, and October 31. The interest rate swap expired on October 31, 2012. The fair value of the swap agreements were zero at inception. The Company entered into the interest rate swap agreements to limit the effect of variable interest rates on the Company’s floating rate debt. The interest rate swap agreements were originally designated as cash flow hedges of the variable rate interest payments due on $135.0 million of the term loans and the revolving credit facility issued June 24, 2003, and accordingly, the effective portion of gains and losses on the fair value of the interest rate swap agreements were previously reported in accumulated other comprehensive loss and reclassified to earnings in the same period in which the hedged interest payment affects earnings.

On ~~October~~June 1511, ~~2007~~2009, the Company ~~entered~~partially ~~into~~terminated athe ~~five-year interest rate swap agreement with a notional amount of~~ $~~100~~35.0 million ~~from~~interest ~~which it will receive periodic payments at the 3 month LIBOR-based variable~~ rate ~~(0.428% at December 31~~swap, ~~2011~~subject ~~based~~to ~~upon the October 31, 2011 reset date) and make periodic payments at~~ a ~~fixed~~partial ~~rate~~termination fee of 5$0.~~135%,~~6 ~~with~~million ~~settlement~~which ~~and~~was ~~rate reset dates every January 31, April 30, July 31, and October 31~~expensed. The ~~fair~~notional ~~value~~amount ~~of the swap~~ was ~~zero~~reduced atto ~~inception~~$20.0 million. ~~The~~All ~~Company~~other ~~entered~~terms ~~into~~of the interest rate swap toagreement ~~limit~~remained ~~the effect of increases on our floating rate debt~~unchanged. ~~The~~As ~~interest rate swap was initially designated as~~ a ~~cash flow hedge of the variable rate interest payments due on $100.0 million of the term loans issued June 24~~result, ~~2003 under~~ the ~~2003~~amount ~~Senior~~included ~~Credit Facility, and accordingly, gains and losses on the fair value of the interest rate swap agreement were previously reported~~ in ~~accumulated~~ other comprehensive ~~loss~~income ~~and~~related ~~reclassified~~ to ~~earnings in~~ the same period in which the hedged interest payment affects earnings. The interest rate swap agreement expires on October 31, 2012. On March 19, 2008, the Company entered into a 4.5 year interest rate swap agreement effective April 30, 2008, with a notional amount of $35.0 million from which it will receive periodic payments at the 3 month LIBOR-based variable rate (0.428% at December 31, 2011 based upon the October 31, 2011 reset date) and make periodic payments at a fixed rate of 3.43%, with settlement and rate reset dates every January 31, April 30, July 31, and October 31. The interest rate swap was ~~effective~~reduced ~~beginning~~pro ~~April 30,~~rata ~~2008~~ and ~~expires on October 31, 2012. As of December 31, 2011, the fair value of the swap contracts is~~ included in ~~Accrued~~earnings ~~Liabilities~~as ~~totaled~~a ~~$3.9~~gain ~~million. As~~(loss) ofon ~~December 31,~~derivative ~~2010, the fair value of the swap contracts included in Accrued Liabilities and Other Long-Term Liabilities was $4~~instrument.~~2 million and $3.5 million, respectively.~~

~~Due~~On to the potential sale of Camping World in September 2008, a highly effective hedge on the $35.0 million outstanding debt by the $35.0 million notional amount interest rate swap agreement was deemed to be no longer probable and was deemed to be reasonably possible. As a result, changes in the value of the $35.0 million interest rate swap agreement are included in earnings beginning on October ~~1, 2008. Change in value from October 1, 2008 to December~~ 31, ~~2008 was $2.4 million. On June 11~~2012, ~~2009,~~ the ~~Company~~remaining ~~partially terminated the $35.0 million~~ interest rate swap, ~~subject~~agreements ~~to a partial termination fee of $0~~expired.6 million which was expensed. The notional amount was reduced to $20.0 million. All other terms of the interest rate swap agreement remained unchanged. As a result, the amount included in other comprehensive income related to the $35.0 million interest rate swap was reduced prorata and included in earnings as a gain (loss) on derivative instrument.

3936

~~Due~~Other toContractual ~~the issuance of an option to the shareholder of the ultimate parent of the Company to purchase Camping World~~Obligations, inCapital ~~the~~Expenditures second quarter of 2009, which option was subsequently terminated, a portion of the highly effective hedge on the $100.0 million outstanding debt by the $100.0 million notional amount interest rate swap agreement was deemed to be no longer probable and was deemed to be reasonably possible. As a result, changes in the value of the last $20.0 million of the $100.0 million interest rate swap agreement are included in earnings beginning on June 5, 2009.Commitments

~~Due~~During ~~to the issuance of the Senior Secured Notes representing fixed rate debt to replace the existing variable rate debt on November 30~~2012, ~~2010,~~deferred ~~the~~executive ~~interest~~compensation ~~rate~~under ~~swaps~~our nodeferred ~~longer~~compensation ~~qualify~~agreements aswas ~~cash~~earned ~~flow~~and ~~hedges as~~ the ~~underlying~~Company ~~cash~~made ~~flows~~payments ~~being~~of ~~hedged~~$1.0 ~~were~~million noon ~~longer~~mature ~~going~~deferred tocompensation ~~occur~~plans. AsThe aCompany ~~result,~~expects ~~the~~to ~~net~~pay ~~loss on the fair value of the interest rate swap agreements included in other comprehensive loss of~~ $61.50 million ~~related to previously effective cash flow hedges as of November 30, 2010, was reclassified to earnings as gain (loss)~~ on ~~derivative instrument and all future changes in~~ the ~~fair~~mature ~~value~~deferred ofcompensation ~~the~~plans ~~interest rate swaps will be included~~ in ~~earnings as gain (loss) on derivative instrument~~2013.

~~Other~~Capital ~~Contractual~~expenditures ~~Obligations~~for 2012 totaled $10.5 million, compared to capital expenditures of $5.1 million in 2011. For 2012, $5.0 million of capital expenditures were funded through operations, $4.8 million through capital contributions, and ~~Commercial~~$0.7 ~~Commitments~~million through proceeds of asset sales. Capital expenditures are anticipated to be approximately $9.1 million for 2013, primarily for new retail stores, a Point Of Sale system, existing retail store upgrades, leasehold improvements, software enhancements, and information technology upgrades. There are no material commitments for capital expenditures at December 31, 2012.

~~During~~The ~~2011,~~Company ~~deferred~~and ~~executive~~a ~~compensation~~majority ~~under~~of its subsidiaries are pass-through entities for federal and state purposes. Distributions to our ~~deferred~~parent ~~compensation~~are ~~agreements~~permitted ~~was~~under ~~earned~~the Senior Secured Notes Indenture and the ~~Company~~CW ~~made~~Credit ~~payments~~Facility for reasonable estimates of ~~$0.8~~the ~~million~~amount onof ~~mature~~federal, ~~deferred~~state ~~compensation~~and ~~plans. The~~local income taxes that the Company ~~expects~~would be required to pay $1with respect to the applicable fiscal year calculated as if the Company were treated as a “C corporation.0” The ~~million~~following ontax distributions have been paid during the ~~mature~~last ~~deferred~~three ~~compensation~~fiscal ~~plans~~years: $4.2 million in 2012, $6.5 million in 2011 and $2.4 million in 2010.

~~Capital~~Our ~~expenditures~~financial ~~for~~operations ~~2011~~have ~~totaled~~been $5affected by economic downturns.1 Other ~~million,~~factors ~~compared~~that tocould ~~capital~~adversely ~~expenditures~~affect ofour ~~$4.5~~operations ~~million~~include increases in ~~2010. For~~operating ~~2011~~costs, ~~$3.6~~fuel ~~million~~shortages ofand ~~capital~~substantial ~~expenditures~~increases ~~were~~in ~~funded~~propane ~~through~~and ~~operations,~~gasoline ~~$970,000~~prices. Such ~~through~~events acould ~~capital~~cause ~~contribution,~~declines ~~$277~~in advertisements,~~000~~ ~~through~~club ~~proceeds~~enrollment ofand ~~asset~~retail ~~sales,~~spending. We ~~and~~are ~~$230,000~~unable ~~paid~~to bypredict ~~lessor. Capital~~at ~~expenditures~~what ~~are~~point ~~anticipated~~fluctuating fuel prices may begin to beadversely ~~approximately~~impact ~~$5.0~~revenues ~~million~~or ~~for~~cash ~~2012,~~flow. We ~~primarily~~believe ~~for~~we ~~new~~will ~~retail~~be ~~stores,~~able ato ~~Point~~partially Ofoffset ~~Sale~~any ~~system,~~cost ~~existing~~increases ~~retail~~with ~~store~~price ~~upgrades,~~increases ~~leasehold~~to ~~improvements,~~our ~~software~~members ~~enhancements,~~along ~~and~~with ~~information~~certain ~~technology~~cost ~~upgrades~~reducing measures.

~~Factors Affecting Future Performance~~Seasonality

Our ~~financial~~cash ~~operations~~flow ~~have~~is ~~been~~highest ~~affected~~in by the ~~recent~~summer ~~economic~~months ~~downturn. Other~~due ~~factors~~to ~~that~~the ~~could~~seasonal ~~adversely~~nature ~~affect~~of ~~our~~the ~~operations~~retail ~~include increases in operating costs~~segment, ~~fuel~~membership ~~shortages~~renewals and ~~substantial~~advertising ~~increases~~prepayments infor ~~propane~~the ~~and~~annual ~~gasoline prices~~directories. Such events could cause declines in advertisements, club enrollment and retail spending. We are unable to predict at what point fluctuating fuel prices may begin to adversely impact revenues or cash flow. We believe we will be able to partially offset any cost increases with price increases to our members along with certain cost reducing measures.

~~Seasonality~~Critical Accounting Policies

~~Our cash flow is highest in the summer months due to the seasonal nature of the retail segment, membership renewals and advertising prepayments for the annual directories.~~General

~~Critical~~Our ~~Accounting~~discussion ~~Policies~~and analysis of our financial condition and results of operations is based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an on-going basis, we evaluate our estimates, including those related to membership programs and incentives, bad debts, inventories, intangible assets, employee health insurance benefits, income taxes, restructuring, contingencies and litigation. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

~~General~~We believe the following critical accounting policies affect our more significant judgments and estimates used in the preparation of our consolidated financial statements.

Our discussion and analysis of our financial condition and results of operations is based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an on-going basis, we evaluate our estimates, including those related to membership programs and incentives, bad debts, inventories, intangible assets, employee health insurance benefits, income taxes, restructuring, contingencies and litigation. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.37

WeRevenue ~~believe the following critical accounting policies affect our more significant judgments and estimates used in the preparation of our consolidated financial statements.~~Recognition

40Merchandise revenue is recognized when products are sold in the retail stores, shipped for mail and Internet orders, or when services are provided to customers. Roadside assistance (“RA”) revenues are deferred and recognized over the life of the membership. RA claim expenses are recognized when incurred. Royalty revenue is earned under the terms of an arrangement with a third party credit card provider based on a percentage of the Company’s outstanding credit card balances with such third party credit card provider. Membership revenue is generated from annual, multi-year and lifetime memberships. The revenue and expenses associated with these memberships are deferred and amortized over the membership period. For lifetime memberships, an 18-year period is used, which is the actuarially determined estimated fulfillment period. Promotional expenses, consisting primarily of direct mail advertising, are deferred and expensed over the period of expected future benefit, typically three months based on historical actual response rates. Renewal expenses are expensed at the time related materials are mailed. Recognized revenues and profit are subject to revisions as the membership progresses to completion. Revisions to membership period estimates would change the amount of income and expense amortized in future accounting periods.

~~Revenue~~Newsstand ~~Recognition~~sales of publications and related expenses are recorded at the time of delivery, net of estimated provision for returns. Subscription sales of publications are reflected in income over the lives of the subscriptions. The related selling expenses are expensed as incurred. Advertising revenues and related expenses are recorded at the time of delivery. Subscription and newsstand revenues and expenses related to annual publications are deferred until the publications are distributed. Revenues and related expenses for consumer shows are recognized when the show occurs.

~~Merchandise~~Accounts revenue is recognized when products are sold in the retail stores, shipped for mail and Internet orders, or when services are provided to customers. Emergency Road Service (“ERS”) revenues are deferred and recognized over the life of the membership. ERS claim expenses are recognized when incurred. Royalty revenue is earned under the terms of an arrangement with a third party credit card provider based on a percentage of the Company’s outstanding credit card balances with such third party credit card provider. Membership revenue is generated from annual, multi-year and lifetime memberships. The revenue and expenses associated with these memberships are deferred and amortized over the membership period. For lifetime memberships, an 18-year period is used, which is the actuarially determined estimated fulfillment period. Promotional expenses, consisting primarily of direct mail advertising, are deferred and expensed over the period of expected future benefit, typically three months based on historical actual response rates. Renewal expenses are expensed at the time related materials are mailed. Recognized revenues and profit are subject to revisions as the membership progresses to completion. Revisions to membership period estimates would change the amount of income and expense amortized in future accounting periods.Receivable

~~Newsstand~~We ~~sales~~estimate ~~of publications and related expenses are recorded at~~ the ~~time~~collectability of ~~delivery,~~our ~~net~~trade ~~of estimated provision for returns~~receivables. ~~Subscription~~A ~~sales~~considerable amount of ~~publications~~judgment ~~are~~is ~~reflected~~required in ~~income~~assessing ~~over~~ the ~~lives~~ultimate realization of ~~the~~these ~~subscriptions. The~~receivables ~~related~~including ~~selling~~the ~~expenses~~current ~~are~~credit-worthiness ~~expensed~~of aseach ~~incurred~~customer. ~~Advertising~~Changes ~~revenues~~in ~~and~~required ~~related~~reserves ~~expenses~~have ~~are~~been recorded atin ~~the~~recent ~~time~~periods ~~of delivery. Subscription~~ and ~~newsstand~~may ~~revenues~~occur ~~and~~in ~~expenses~~the ~~related~~future due to ~~annual publications are deferred until~~ the ~~publications~~market ~~are~~conditions ~~distributed. Revenues~~ and ~~related expenses for consumer shows are recognized when~~ the ~~show~~economic ~~occurs~~environment.

~~Accounts Receivable~~Inventory

We ~~estimate~~state inventories at the ~~collectability~~lower of ~~our~~cost ~~trade~~or ~~receivables~~market. AIn ~~considerable~~assessing ~~amount~~the ultimate realization of ~~judgment~~inventories, iswe are required into ~~assessing~~make ~~the~~judgments ~~ultimate~~as ~~realization~~to offuture ~~these~~demand ~~receivables~~requirements ~~including~~and compare that with the current ~~credit-worthiness~~or ofcommitted ~~each~~inventory ~~customer~~levels. ~~Changes~~We have recorded changes in required reserves ~~have~~in ~~been~~recent ~~recorded~~periods due to changes in ~~recent~~strategic ~~periods~~direction, ~~and~~such as discontinuances of product lines as well as changes in market conditions due to changes in demand requirements. It is possible that changes in required inventory reserves may continue to occur in the future due to the market conditions ~~and the economic environment~~.

~~Inventory~~Long-Lived Assets

WePurchased ~~state~~intangible ~~inventories~~assets atwith ~~the~~finite ~~lower~~lives ofare ~~cost~~amortized orusing ~~market. In assessing~~ the ~~ultimate~~straight-line ~~realization~~method ofover ~~inventories,~~the weestimated ~~are~~economic ~~required~~lives toof ~~make judgments as to future demand requirements and compare that with~~ the ~~current or committed inventory levels. We have recorded changes in required reserves in recent periods due to changes in strategic direction~~assets, ~~such~~ranging asfrom ~~discontinuances~~one ~~of product lines as well as changes in market conditions due~~ to ~~changes~~six ~~in demand requirements~~years. ~~It is possible that changes in required inventory reserves may continue to occur in the future due to the market conditions.~~

Long-~~Lived~~lived ~~Assets~~assets, such as property, plant and equipment and purchased intangible assets with finite lives are evaluated for impairment whenever events or changes in circumstances indicate the carrying value of an asset may not be recoverable in accordance with accounting guidance on accounting for the impairment or disposal of long-lived assets. We assess the fair value of the assets based on the future cash flow the assets are expected to generate and recognize an impairment loss when estimated undiscounted future cash flow expected to result from the use of the asset plus net proceeds expected from disposition of the asset (if any) are less than the carrying value of the asset. When an impairment is identified, we reduce the carrying amount of the asset to its estimated fair value based on a discounted cash flow approach or, when available and appropriate, comparable market values.

~~Purchased intangible assets with finite lives are amortized using the straight-line method over the estimated economic lives of the assets, ranging from one to fifteen years.~~38

~~Long-lived~~We ~~assets,~~have ~~such~~evaluated asthe ~~property,~~remaining ~~plant~~useful ~~and~~lives ~~equipment~~of ~~and~~our finite-lived purchased intangible assets ~~with~~to ~~finite~~determine ~~lives~~if ~~are~~any ~~evaluated~~adjustments ~~for~~to ~~impairment whenever events or changes in circumstances indicate~~ the ~~carrying~~useful ~~value~~lives ofwere annecessary ~~asset may not be recoverable in accordance with accounting guidance on accounting for the impairment~~ or ~~disposal~~if ofany ~~long-lived assets. We assess the fair value~~ of ~~the~~these assets ~~based~~had onindefinite ~~the~~lives ~~future~~and ~~cash~~were ~~flow~~therefore ~~the~~not ~~assets~~subject ~~are expected~~ to ~~generate~~amortization. We ~~and~~determined ~~recognize~~that anno ~~impairment~~adjustments ~~loss when estimated undiscounted future cash flow expected~~ to ~~result from~~ the ~~use~~useful oflives ~~the asset plus net proceeds expected from disposition~~ of ~~the~~our ~~asset~~finite-lived ~~(if~~purchased ~~any)~~intangible ~~are~~assets ~~less~~were ~~than the carrying value of the asset~~necessary. ~~When~~The anfinite-lived ~~impairment~~purchased isintangible ~~identified,~~assets weconsist ~~reduce the carrying amount~~ of ~~the~~membership ~~asset~~customer tolists, ~~its~~and ~~estimated~~deferred ~~fair~~financing ~~value~~costs ~~based~~which onhave aweighted ~~discounted~~average ~~cash~~useful ~~flow~~lives ~~approach~~of ~~or,~~approximately ~~when~~6 ~~available~~years ~~and appropriate, comparable market values~~each.

41Indefinite-Lived Intangible Assets

WeThe ~~have~~Company ~~evaluated~~evaluates ~~the~~goodwill ~~remaining~~and ~~useful~~indefinite-lived ~~lives~~intangible ofassets ~~our~~for ~~finite~~impairment on an annual basis, or more frequently if events or changes in circumstances indicate that the Company’s goodwill or indefinite-lived ~~purchased~~ intangible assets tomight ~~determine~~be ifimpaired. The ~~any~~Company ~~adjustments~~assesses qualitative factors to ~~the~~determine ~~useful~~whether ~~lives~~it ~~were~~is ~~necessary~~more orlikely ifthan ~~any~~not ofthat ~~these~~the ~~assets~~fair ~~had~~value ~~indefinite~~of ~~lives~~a ~~and~~reporting ~~were~~unit ~~therefore~~is ~~not~~less ~~subject~~than toits ~~amortization~~carrying amount. WeIf ~~determined~~the Company determines it is more likely than not that nothe ~~adjustments~~fair value of a reporting unit is less than its carrying amount, then it is required to perform the ~~useful~~first ~~lives~~step of ~~our~~a ~~finite~~two-~~lived~~step ~~purchased~~impairment ~~intangible~~test ~~assets~~by ~~were~~calculating ~~necessary~~the fair value of the reporting unit and comparing the fair value with the carrying amount of the reporting unit. ~~The~~If ~~finite-lived~~the ~~purchased~~carrying ~~intangible~~amount ~~assets~~of ~~consist~~a ofreporting ~~membership~~unit ~~customer~~exceeds ~~lists~~its fair value, ~~non-compete~~then ~~and~~the ~~deferred~~Company ~~consulting~~is ~~agreements~~required ~~and~~to ~~deferred~~perform ~~financing~~the ~~costs~~second ~~which~~step ~~have~~of ~~weighted~~the ~~average~~two-step ~~useful~~goodwill ~~lives~~impairment test to measure the amount of ~~approximately~~the 6impairment ~~years,~~loss. There 15were ~~years~~no ~~and~~changes 6in the carrying amount of goodwill for the years ended December 31, ~~respectively~~2012 and 2011.

~~Indefinite~~Self-~~Lived~~insurance ~~Intangible Assets~~Program

~~We evaluate indefinite~~Self-~~lived~~insurance ~~intangible~~accruals ~~assets~~ for ~~impairment~~workers atcompensation ~~least annually or when events indicate that an impairment exists. The impairment tests for goodwill~~ and ~~other~~general ~~indefinite-lived~~liability ~~intangible~~programs ~~assets~~ are ~~assessed~~calculated for impairment using fair value measurement techniques. Specifically, goodwill impairment is determined using a two-step process. The first step of the goodwill impairment test is used to identify potential impairment by ~~comparing~~outside ~~the~~actuaries ~~fair~~and ~~value~~are ofbased aon ~~reporting~~claims ~~unit~~filed ~~with~~and ~~the~~include ~~net~~estimates ~~book~~for ~~value~~claims ~~(or~~incurred ~~carrying~~but ~~amount), including goodwill. If the fair value of the reporting unit exceeds the carrying amount, goodwill of the reporting unit is considered~~ not ~~impaired~~yet ~~and the second step of the impairment test is unnecessary~~reported. IfProjections ~~the carrying amount~~ of ~~the~~future ~~reporting unit exceeds the fair value, or if another indicator of impairment exists, the second step of the goodwill impairment test is performed to measure the amount of impairment~~ loss, ifare ~~any. The~~inherently ~~second~~uncertain ~~step~~because of the ~~goodwill~~random ~~impairment~~nature ~~test compares the implied fair value~~ of ~~the~~insurance ~~reporting~~claims ~~unit’s~~occurrences goodwill with the carrying amount of that goodwill. If the carrying amount of the reporting unit’s goodwill exceeds the implied fair value of that goodwill, an impairment loss is recognized in an amount equal to that excess. The implied fair value of goodwill is determined in the same manner as the amount of goodwill recognized in a business combination, accordingly the fair value of the reporting unit is allocated to all of the assets and ~~liabilities~~could ofbe ~~that~~substantially ~~unit~~affected as if ~~the~~future ~~reporting~~occurrences ~~unit~~and ~~had~~claims ~~been~~differ ~~acquired~~significantly infrom athese ~~business~~assumptions ~~combination~~ and ~~the~~historical ~~fair value of the reporting unit was the purchase price paid to acquire the reporting unit~~trends.

~~Determining~~Derivative ~~the~~Financial fair value of a reporting unit under the first step of the goodwill impairment test and determining the fair value of individual assets and liabilities of a reporting unit under the second step of the goodwill impairment test is judgmental in nature and often involves the use of significant estimates and assumptions. These estimates and assumptions could have a significant impact on whether or not an impairment charge is recognized and also the extent of such charge. Our estimates of fair value utilized in goodwill and other indefinite-lived intangible asset tests may be based upon a number of factors, including assumptions about the projected future cash flows, discount rate, growth rate, determination of market comparables, technological change, economic conditions or changes to our business operations. Such changes may result in impairment charges recorded in future periods.Instruments

The ~~fair~~Company ~~value~~accounts offor ~~our~~derivative ~~reporting~~instruments ~~units~~and ishedging ~~annually~~activities ~~determined~~in ~~using~~accordance awith ~~combination~~accounting ofguidance ~~the~~for ~~income~~accounting ~~approach~~for ~~and~~derivative ~~the~~instruments ~~market~~and ~~approach~~hedging activities. ~~Under~~All ~~the~~derivatives ~~income~~are ~~approach,~~recognized on the ~~fair~~balance ~~value~~sheet ofat atheir ~~reporting~~fair ~~unit~~value. On isthe ~~calculated~~date ~~based~~that on the ~~present~~Company ~~value~~enters ofinto ~~estimated~~a ~~future~~derivative ~~cash~~contract, ~~flows. Future~~management ~~cash~~formally ~~flows~~documents ~~are~~all ~~estimated~~relationships bybetween ushedging ~~under~~instruments ~~the~~and ~~market~~hedged ~~approach~~items, ~~fair~~as ~~value~~well isas ~~estimated~~risk ~~based~~management onobjectives ~~market~~and ~~multiples~~strategies offor ~~revenue~~undertaking orvarious ~~earnings~~hedge ~~for comparable companies~~transactions.

42Changes in the fair value of a derivative that is highly effective and that is designated and qualifies as a cash flow hedge (a “swap”), to the extent that the hedge is effective, are recorded in accumulated other comprehensive loss, until earnings are affected by the variability of cash flows of the hedged transaction. The Company measures effectiveness of the swap at each quarter end using the Hypothetical Derivative Method. Under this method, hedge effectiveness is measured based on a comparison of the change in fair value of the actual swap designated as the hedging instrument and the change in fair value of the hypothetical swap which would have the terms that identically match the critical terms of the hedged cash flows from the anticipated debt issuance. The amount of ineffectiveness, if any, recorded in earnings would be equal to the excess of the cumulative change in the fair value of the swap over the cumulative change in the fair value of the plain vanilla swap lock, as defined in the accounting literature. Once a swap is settled, the effective portion is amortized over the estimated life of the hedge item.

WeThe ~~performed~~Company anutilized ~~annual~~derivative ~~goodwill~~financial ~~impairment~~instruments ~~test~~to asmanage ~~required~~its ~~and~~exposure ~~there~~to ~~were~~interest norate ~~goodwill impairment indicators for our other reporting units~~risks. ~~Based~~The onCompany ~~the~~does ~~results~~not ofenter ~~the~~into ~~annual~~derivative ~~impairment~~financial ~~tests,~~instruments ~~we determined that no indicators of goodwill impairment existed~~ for ~~the~~trading ~~other reporting units as of December 31, 2011~~purposes. ~~However,~~The ~~future~~interest ~~goodwill~~rate ~~impairments~~swap ~~tests~~agreements ~~could~~expired ~~result in a charge to earnings. We will continue to evaluate goodwill~~ on anOctober 31, ~~annual basis and whenever events and changes in circumstances indicate that there may be a potential impairment~~2012.

~~Self-insurance Program~~39

~~Self-insurance~~Income accruals for workers compensation and general liability programs are calculated by outside actuaries and are based on claims filed and include estimates for claims incurred but not yet reported. Projections of future loss are inherently uncertain because of the random nature of insurance claims occurrences and could be substantially affected if future occurrences and claims differ significantly from these assumptions and historical trends.Taxes

~~Derivative~~Significant ~~Financial~~judgment ~~Instruments~~is required in determining the Company’s tax provision and in evaluating its tax positions. The Company establishes accruals for certain tax contingencies when, despite the belief that the Company’s tax return positions are fully supported, the Company believes that certain positions may be challenged and that the Company’s positions may not be fully sustained. The tax contingency accruals are adjusted in light of changing facts and circumstances, such as the progress of tax audits, case law and emerging legislation. The Company’s tax provision includes the impact of tax contingency accruals and changes to the accruals, including related interest and penalties, as considered appropriate by management.

~~The~~ITEM ~~Company~~7A: ~~accounts~~QUANTITATIVE ~~for~~AND ~~derivative~~QUALITATIVE ~~instruments~~DISCLOSURES ~~and~~ABOUT ~~hedging~~MARKET activities in accordance with accounting guidance for accounting for derivative instruments and hedging activities. All derivatives are recognized on the balance sheet at their fair value. On the date that the Company enters into a derivative contract, management formally documents all relationships between hedging instruments and hedged items, as well as risk management objectives and strategies for undertaking various hedge transactions.RISK

~~Changes~~We inare ~~the~~exposed ~~fair~~to ~~value~~market ofrisks arelating ~~derivative that is highly effective and that is designated and qualifies as a cash flow hedge (a “swap”),~~ to ~~the~~fluctuations ~~extent that the hedge is effective, are recorded~~ in ~~accumulated~~interest ~~other comprehensive loss, until earnings are affected by the variability of cash flows of the hedged transaction~~rates. ~~The~~Our ~~Company~~objective ~~measures effectiveness~~ of ~~the~~financial ~~swap~~risk atmanagement ~~each quarter end using the Hypothetical Derivative Method. Under this method, hedge effectiveness~~ is ~~measured~~to ~~based~~minimize ~~on a comparison of~~ the ~~change~~negative inimpact ~~fair value~~ of ~~the~~interest ~~actual~~rate ~~swap~~fluctuations ~~designated~~on asour ~~the~~earnings ~~hedging instrument~~ and ~~the change in fair value of the hypothetical swap which would have the terms that identically match the critical terms of the hedged~~ cash flows ~~from the anticipated debt issuance~~. ~~The~~Interest ~~amount~~rate ofrisk ~~ineffectiveness,~~is ifmanaged ~~any,~~through ~~recorded in earnings would be equal to~~ the ~~excess~~use of ~~the~~a ~~cumulative~~combination ~~change in the fair value~~ of ~~the~~fixed ~~swap~~and ~~over~~variable ~~the~~interest ~~cumulative~~debt ~~change~~as inwell ~~the fair value of the plain vanilla swap lock,~~ as ~~defined in~~ the ~~accounting~~periodic ~~literature. Once~~use ~~a swap is settled, the effective portion is amortized over the estimated life~~ of ~~the~~interest ~~hedge~~rate ~~item~~collar contracts.

The ~~Company~~following ~~utilizes~~information ~~derivative~~discusses ~~financial~~the ~~instruments~~sensitivity to ~~manage~~our ~~its~~earnings. The ~~exposure~~range toof ~~interest~~changes ~~rate~~chosen ~~risks~~for this analysis reflects our view of changes which are reasonably possible over a one-year period. ~~The~~These ~~Company~~forward-looking ~~does~~disclosures ~~not~~are ~~enter~~selective ~~into~~in ~~derivative~~nature and only address the potential impacts from financial instruments. They ~~for~~do ~~trading~~not ~~purposes~~include other potential effects which could impact our business as a result of these interest rate fluctuations.

~~Due~~Interest toRate ~~the~~Sensitivity issuance of fixed rate date to replace the existing variable rate debt in November 2010, the interest rate swaps no longer qualify as cash flow hedges. As a result, the net loss included in other comprehensive loss of $6.5 million as of November 30, 2010 was reclassed to earnings and all future changes in the fair value of the interest rate swaps will be included in earnings.Analysis

~~Income~~At ~~Taxes~~December 31, 2012, we had debt totaling $332.5 million, net of $5.0 million in original issue discount, comprised of $11.9 million of variable rate debt, and $320.6 million of fixed rate debt. Holding other variables constant (such as debt levels), a one-percentage point increase/ decrease in interest rates would have an unfavorable/ favorable impact on earnings and cash flow of approximately $0.1 million.

~~Significant~~Credit judgment is required in determining the Company’s tax provision and in evaluating its tax positions. The Company establishes accruals for certain tax contingencies when, despite the belief that the Company’s tax return positions are fully supported, the Company believes that certain positions may be challenged and that the Company’s positions may not be fully sustained. The tax contingency accruals are adjusted in light of changing facts and circumstances, such as the progress of tax audits, case law and emerging legislation. The Company’s tax provision includes the impact of tax contingency accruals and changes to the accruals, including related interest and penalties, as considered appropriate by management.Risk

43We are exposed to credit risk on accounts receivable. We provide credit to customers in the ordinary course of business and perform ongoing credit evaluations. Concentrations of credit risk with respect to trade receivables are limited due to the number of customers comprising our customer base. We currently believe our allowance for doubtful accounts is sufficient to cover customer credit risks.

~~New~~Disclosure ~~Accounting~~Regarding ~~Standards~~Forward Looking Statements

InThis ~~January~~annual report on Form ~~2011~~10-K contains statements that are “forward looking statements,” ~~the~~and ~~Company~~includes, ~~was~~among ~~required~~other tothings, ~~adopt~~discussions aof ~~newly~~our ~~issued~~business ~~accounting~~strategy ~~standard~~and ~~which~~expectations ~~requires~~concerning ~~additional~~market ~~disclosure~~position, ~~requiring~~future anoperations, ~~entity~~margins, toprofitability, ~~present~~liquidity ~~disaggregated~~and ~~information~~capital ~~about~~resources, ~~activity~~as inwell ~~Level~~as 3statements ~~fair~~concerning ~~value~~the ~~measurements~~integrations onof aacquired ~~gross~~operations ~~basis,~~and ~~rather~~the ~~than~~achievement aof ~~single~~financial ~~amount~~benefits and operational efficiencies in connection with acquisitions. AsGenerally, ~~this~~these ~~newly~~statements ~~issued~~relate ~~accounting~~to ~~standard~~business ~~only~~plans ~~requires~~or ~~enhanced~~strategies, ~~disclosure~~projected or anticipated benefits or other consequences of such plans or strategies, the ~~adoption~~number of ~~this~~acquisitions ~~standard~~and ~~did~~projected ~~not~~or ~~impact~~anticipated ~~our~~benefits ~~financial~~from ~~position~~acquisitions made by or to be made by us, ~~results~~or projections involving anticipated revenues, expenses, earnings, levels of ~~operations~~capital expenditures or ~~cash~~other ~~flows~~aspects of operating results. Such statements may be identified by such words or phrases as “will likely result,” “are expected to,” “will continue,” “outlook,” “will benefit,” “is anticipated,” “estimate,” “project,” “management believes” or similar expressions. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those discussed in such statements and no assurance can be given that the results in any forward-looking statement will be achieved. For these statements, we claim the protection of the safe harbor for forward-looking

In January 2011, the Company was required to adopt a newly issued accounting standard which requires the Company to perform step 2 of the goodwill impairment test if a reporting unit has a carrying amount equal to or less than zero and there are qualitative factors that indicate it is more likely than not that a goodwill impairment exists. The adoption of the newly issued accounting standard did not impact our financial position, results of operations or cash flows.40

Instatements ~~June 2011,~~contained ain ~~new accounting standard was issued that amends~~ the ~~disclosure~~Private ~~requirements~~Securities ~~for~~Litigation ~~the~~Reform ~~presentation~~Act of ~~other~~1995. Any ~~comprehensive~~forward-looking ~~income~~statement ~~(“OCI”)~~speaks inonly ~~the~~as ~~financial statements, including elimination~~ of the ~~option~~date toon ~~present~~which ~~OCI~~it inis ~~the statement of stockholder’s or member’s deficit. As a result of this new standard~~made, ~~OCI~~ and ~~its~~we ~~components~~disclaim ~~will~~any beobligation ~~required~~ to besubsequently ~~presented~~revise ~~for~~any ~~both~~forward-looking ~~interim and annual periods in a single continuous financial~~ statement, ~~the~~to ~~statement~~reflect ofevents ~~comprehensive income,~~ or incircumstances ~~two~~after ~~separate~~such ~~but~~date ~~consecutive~~or ~~financial statements, consisting of a statement of income followed by a separate statement of OCI. In addition, items that are reclassified from OCI~~ to ~~net~~reflect ~~income must be presented on~~ the ~~face~~occurrence of ~~the~~anticipated ~~financial~~or ~~statement. This~~unanticipated ~~new standard is required to be applied retrospectively beginning in 2012~~events.

~~ITEM~~Although ~~7A:~~we ~~QUANTITATIVE~~believe ~~AND~~that ~~QUALITATIVE~~the ~~DISCLOSURES~~expectations ~~ABOUT~~reflected ~~MARKET~~in ~~RISK~~such forward looking statements are reasonable, certain factors could cause the Company’s actual results to differ materially from those expressed or implied in any forward looking statements contained herein. Such factors include those discussed in Item 1A, “Risk Factors,” in this annual report on Form 10-K as well as the additional factors noted below. It is not possible to foresee all such factors and, accordingly, these factors should not be seen as complete or exhaustive.

WeAll phases of our operations are ~~exposed~~subject to ~~market~~a ~~risks~~number ~~relating~~of touncertainties, ~~fluctuations~~risks inand ~~interest~~other ~~rates. Our~~influences, ~~objective~~including ofconsumer ~~financial~~spending, ~~risk~~fuel ~~management~~prices, isgeneral toeconomic ~~minimize~~conditions, ~~the~~regulatory ~~negative~~changes, ~~impact~~changes ofin interest ~~rate~~rates, ~~fluctuations~~availability onof ~~our~~debt ~~earnings~~financing in capital markets and ~~cash~~competition, ~~flows. Interest~~many ~~rate~~of ~~risk~~which isare ~~managed~~outside ~~through~~our ~~the~~control, ~~use~~any one of which, or a combination of ~~fixed~~which, ~~and~~could ~~variable~~materially ~~interest~~affect ~~debt~~the asresults ~~well~~of asour operations and whether the ~~periodic~~forward ~~use~~looking ofstatements ~~interest~~made ~~rate~~by ~~collar~~us ~~contracts~~ultimately prove to be accurate.

The following information discusses the sensitivity to our earnings. The range of changes chosen for this analysis reflects our view of changes which are reasonably possible over a one-year period. These forward-looking disclosures are selective in nature and only address the potential impacts from financial instruments. They do not include other potential effects which could impact our business as a result of these interest rate fluctuations.41

~~Interest~~ITEM ~~Rate~~8: FINANCIAL ~~Sensitivity~~STATEMENTS ~~Analysis~~AND SUPPLEMENTARY DATA

AtIndex ~~December 31,~~to ~~2011,~~Financial we had debt totaling $337.4 million, net of $6.1 million in original issue discount, comprised of $10.5 million of variable rate debt, and $326.9 million of fixed rate debt. Holding other variables constant (such as debt levels), the earnings and cash flow impact of a one-percentage point increase/ decrease in interest rates would have an unfavorable/ favorable impact less than $0.1 million.Statements

Credit Risk

	Page

Report of Independent Registered Public Accounting Firm	43



Consolidated Balance Sheets as of December 31, 2012 and 2011	44



Consolidated Statements of Operations and Comprehensive Income (Loss) for the years ended December 31, 2012, 2011 and 2010	45



Consolidated Statements of Stockholder’s or Member’s Deficit for the years ended December 31, 2012, 2011 and 2010	46



Consolidated Statements of Cash Flows for the years ended December 31, 2012, 2011 and 2010	47



Notes to Consolidated Financial Statements	48

WeAll ~~are~~financial ~~exposed~~statement toschedules ~~credit~~have ~~risk~~been onomitted ~~accounts~~since ~~receivable. We~~the ~~provide~~required ~~credit~~information tois ~~customers~~included in the ~~ordinary~~consolidated ~~course~~financial ofstatements, ~~business and perform ongoing credit evaluations. Concentrations of credit risk with respect to trade receivables are limited due to~~ the ~~number~~Notes ofthereto ~~customers~~or ~~comprising~~because ~~our~~such ~~customer~~information ~~base. We currently believe our allowance for doubtful accounts~~ is ~~sufficient~~not ~~to cover customer credit risks~~applicable.

4442

~~Disclosure~~REPORT ~~Regarding~~OF ~~Forward~~INDEPENDENT ~~Looking~~REGISTERED ~~Statements~~PUBLIC ACCOUNTING FIRM

~~This~~Board ~~filing contains statements that are “forward looking statements,” and includes, among other things, discussions~~ of our business strategy and expectations concerning market position, future operations, margins, profitability, liquidity and capital resources, as well as statements concerning the integrations of acquired operations and the achievement of financial benefits and operational efficiencies in connection with acquisitions. Forward looking statements are included in “Business- General,” “Business- Industry Overview,” “Business- Our Competitive Strengths,” “Business- Our Strategy,” “Business- Membership Clubs,” “Business- Membership Products and Services,” “Business- Retail,” “Business- Marketing,” “Business- Operations,” “Business- Information Support Services,” “Business- Media,” “Business- Regulation,” “Business- Competition,” “Risk Factors,” “Legal Proceedings,” and in “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Although we believe that the expectations reflected in such forward looking statements are reasonable, we can give no assurance that such expectations will prove to have been correct. Generally, these statements relate to business plans or strategies, projected or anticipated benefits or other consequences of such plans or strategies, the number of acquisitions and projected or anticipated benefits from acquisitions made by or to be made by us, or projections involving anticipated revenues, expenses, earnings, levels of capital expenditures or other aspects of operating results. All phases of our operations are subject to a number of uncertainties, risks and other influences, including consumer spending, fuel prices, general economic conditions, regulatory changes, changes in interest rates, availability of debt financing in capital markets and competition, many of which are outside our control, any one of which, or a combination of which, could materially affect the results of our operations and whether the forward looking statements made by us ultimately prove to be accurate. Reference is made to Item 1A relating to Risk Factors applicable to us.Directors

45Good Sam Enterprises, LLC

~~ITEM~~We ~~8: FINANCIAL~~have ~~STATEMENTS~~audited ~~AND~~the ~~SUPPLEMENTARY~~accompanying ~~DATA~~consolidated balance sheets of Good Sam Enterprises, LLC and subsidiaries as of December 31, 2012 and 2011, and the related consolidated statements of operations and comprehensive income (loss), stockholder’s or member’s deficit, and cash flows for each of the three years in the period ended December 31, 2012. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

~~Index~~We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to ~~Financial~~obtain ~~Statements~~reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit of the Company’s internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

	Page
Report of Independent Registered Public Accounting Firm	47
Consolidated Balance Sheets as of December 31, 2011 and 2010	48
Consolidated Statements of Operations for the years ended December 31, 2011, 2010 and 2009	49
Consolidated Statements of Stockholder’s or Member’s Deficit for the years ended December 31, 2011, 2010 and 2009	50
Consolidated Statements of Cash Flows for the years ended December 31, 2011, 2010 and 2009	51
Notes to Consolidated Financial Statements	52

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Good Sam Enterprises, LLC. and subsidiaries at December 31, 2012 and 2011, and the consolidated results of their operations and their cash flows for each of the three years in the period ended December 31, 2012, in conformity with U.S. generally accepted accounting principles.

~~All~~/s/ ~~financial~~Ernst ~~statement~~& ~~schedules~~Young ~~have been omitted since the required information is included in the consolidated financial statements, the Notes thereto or because such information is not applicable.~~LLP

46Los Angeles, California

~~REPORT~~March 15, ~~OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM~~2013

~~Board of Directors~~43

~~Good~~GOOD ~~Sam~~SAM ~~Enterprises~~ENTERPRISES, LLC AND SUBSIDIARIES

WeCONSOLIDATED ~~have~~BALANCE audited the accompanying consolidated balance sheets of Good Sam Enterprises, LLC and its subsidiaries (the “Company,” as described in Note 1), a wholly owned subsidiary of Affinity Group Holdings, LLC, as of December 31, 2011 and 2010, and the related consolidated statement of operations, stockholders’ or member’s deficit and cash flows for each of the three years in the period ended December 31, 2011. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.SHEETS

WeDECEMBER ~~conducted~~31, ~~our~~2012 ~~audits~~AND in2011 ~~accordance with the standards of the Public Company Accounting Oversight Board~~ (~~United~~IN States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit of the Company’s internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstancesTHOUSANDS, ~~but~~EXCEPT ~~not~~UNIT for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.AMOUNTS)

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Good Sam Enterprises, LLC and subsidiaries at December 31, 2011 and 2010, and the consolidated results of their operations and their cash flows for each of the three years in the period ended December 31, 2011, in conformity with U.S. generally accepted accounting principles.

	2012		2011
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	19,946	$	20,275
Accounts receivable, less allowance for doubtful accounts of $2,553 in 2012 and $2,086 in 2011	31,523		32,972
Note from affiliate	-		3,117
Inventories	65,221		56,558
Prepaid expenses and other assets	13,730		11,792
Total current assets	130,420		124,714

PROPERTY AND EQUIPMENT, net	23,998		22,563
NOTE FROM AFFILIATE	5,075		4,587
INTANGIBLE ASSETS, net	12,365		14,715
GOODWILL	49,944		49,944
DEFERRED TAX ASSET	79		-
OTHER ASSETS	8,480		6,440
Total assets	$	230,361	$	222,963

LIABILITIES AND MEMBER’S DEFICIT
CURRENT LIABILITIES:
Accounts payable	$	17,004	$	18,050
Accrued interest	3,016		3,989
Accrued income taxes	2,725		2,263
Accrued liabilities	26,929		27,519
Deferred revenues and gains	54,583		54,870
Current portion of long-term debt	10,000		12,422
Total current liabilities	114,257		119,113

DEFERRED REVENUES AND GAINS	34,316		30,979
LONG-TERM DEBT, net of current portion	322,470		325,028
OTHER LONG-TERM LIABILITIES	3,114		1,639
	474,157		476,759

COMMITMENTS AND CONTINGENCIES

MEMBER’S DEFICIT:
Membership units, 2,000 units issued and outstanding	1		1
Member contributions	78,825		74,000
Accumulated deficit	(322,622)		(327,797		)
Total member’s deficit	(243,796)		(253,796		)
Total liabilities and member’s deficit	$	230,361	$	222,963

~~/s/~~See ~~Ernst~~notes &to ~~Young~~consolidated ~~LLP~~financial ~~Los Angeles, California March 16, 2012~~statements.

4744

GOOD SAM ENTERPRISES, LLC AND SUBSIDIARIES

CONSOLIDATED ~~BALANCE~~STATEMENTS ~~SHEETS~~OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

FOR THE YEARS ENDED DECEMBER 31, 2012, 2011 AND 2010 (IN THOUSANDS~~, EXCEPT SHARE/UNIT AMOUNTS~~)

	2011				2010
	2012			2011			2010
ASSETS
REVENUES:
CURRENT ASSETS:
Membership services	$	153,788		$	147,806		$	146,274
Cash and cash equivalents	$	20,275			$	15,363
Retail	325,774			282,366			270,551
Accounts receivable, less allowance for doubtful accounts of $2,086 in 2011 and $3,770 in 2010	32,972				30,215
Membership services - media	39,180			51,232			53,844
Note from affiliate	3,117				-
	518,742			481,404			470,669
Inventories	56,558				52,673
COSTS APPLICABLE TO REVENUES:
Prepaid expenses and other assets	11,792				14,594
Membership services	86,525			81,521			85,211
Total current assets	124,714				112,845
Retail	201,699			167,431			157,574
PROPERTY AND EQUIPMENT, net	22,563				27,231
Membership services - media	26,598			39,803			40,584
NOTE FROM AFFILIATE	4,587				4,508
	314,822			288,755			283,369
INTANGIBLE ASSETS, net	14,715				20,852
GROSS PROFIT	203,920			192,649			187,300
GOODWILL	49,944				49,944
OPERATING EXPENSES:
OTHER ASSETS	6,440				6,638
Selling, general and administrative	141,427			130,845			126,577
Total assets	$	222,963			$	222,018
Financing expense (recovery)	-			(19)			14,364
LIABILITIES AND STOCKHOLDER’S OR MEMBER’S DEFICIT
Depreciation and amortization	14,457			16,512			18,536
CURRENT LIABILITIES:
	155,884			147,338			159,477
Accounts payable	$	18,050			$	11,041
INCOME FROM OPERATIONS	48,036			45,311			27,823
Accrued interest	3,989				4,148
NON-OPERATING ITEMS:
Accrued income taxes	2,263				1,712
Interest income	853			550			499
Accrued liabilities	27,519				28,604
Interest expense	(43,799)			(45,221)			(39,231		)
Deferred revenues and gains	54,870				56,589
Gain (loss) on derivative instrument	3,871			3,899			(6,680		)
Current portion of long-term debt	12,422				107
Loss on debt restructure	-			-			(2,678		)
Total current liabilities	119,113				102,201
Loss on debt repayment	(440)			-			-
DEFERRED REVENUES AND GAINS	30,979				33,800
Gain on sale of assets	1,171			632			1
LONG-TERM DEBT, net of current portion	325,028				332,124
	(38,344)			(40,140)			(48,089		)
OTHER LONG-TERM LIABILITIES	1,639				6,066
INCOME (LOSS) FROM OPERATIONS BEFORE INCOME TAXES	9,692			5,171			(20,266		)
	476,759				474,191
INCOME TAX (EXPENSE) BENEFIT	(317)			(1,264)			1,493
COMMITMENTS AND CONTINGENCIES
NET INCOME (LOSS)	9,375			3,907			(18,773		)
STOCKHOLDER’S OR MEMBER’S DEFICIT:
OTHER COMPREHENSIVE INCOME (LOSS)
Membership units, 2,000 units issued and outstanding	1				-
Unrealized gain on interest rate swap	-			-			191
Common stock, $.001 par value, 2,000 shares authorized, 2,000 shares issued and outstanding	-				1
Gain on interest rate swap reclassified into earnings	-			-			6,809
Stockholder or member contributions	74,000				73,030
COMPREHENSIVE INCOME (LOSS)	$	9,375		$	3,907		$	(11,773	)
Accumulated deficit	(327,797		)		(325,204		)
Total stockholder’s or member’s deficit	(253,796		)		(252,173		)
Total liabilities and stockholder’s or member’s deficit	$	222,963			$	222,018

See notes to consolidated financial statements.

4845

GOOD SAM ENTERPRISES, LLC AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF ~~OPERATIONS~~STOCKHOLDER’S OR MEMBER’S DEFICIT

FOR THE YEARS ENDED DECEMBER 31, ~~2011~~2012, ~~2010,~~2011 AND ~~2009 (IN THOUSANDS)~~2010

	2011			2010			2009
REVENUES:
Membership services	$	147,806		$	146,274		$	142,147
Media	51,232			53,844			59,061
Retail	282,366			270,551			270,573
	481,404			470,669			471,781
COSTS APPLICABLE TO REVENUES:
Membership services	81,521			85,211			84,826
Media	39,803			40,584			46,079
Retail	167,431			157,574			164,510
	288,755			283,369			295,415
GROSS PROFIT	192,649			187,300			176,366
OPERATING EXPENSES:
Selling, general and administrative	130,845			126,577			128,917
Goodwill impairment	-			-			46,884
Financing expense (recovery)	(19		)	14,364			2,607
Depreciation and amortization	16,512			18,536			21,076
	147,338			159,477			199,484
INCOME (LOSS) FROM OPERATIONS	45,311			27,823			(23,118		)
NON-OPERATING ITEMS:
Interest income	550			499			517
Interest expense	(45,221		)	(39,231		)	(30,873		)
Gain (loss) on derivative instrument	3,899			(6,680		)	745
Gain (loss) on debt restructure	-			(2,678		)	4,678
Gain (loss) on sale of assets	632			1			(604		)
Other non-operating income (expense), net	-			-			(659		)
	(40,140		)	(48,089		)	(26,196		)
INCOME (LOSS) FROM OPERATIONS BEFORE
INCOME TAXES	5,171			(20,266		)	(49,314		)
INCOME TAX (EXPENSE) BENEFIT	(1,264		)	1,493			10,366
NET INCOME (LOSS)	$	3,907		$	(18,773	)	$	(38,948	)

(IN THOUSANDS, EXCEPT SHARE/UNIT AMOUNTS)

See notes to consolidated financial statements.

											Accumulated
							Stockholder				Other
	Common Stock			Member Units			or Member		Accumulated		Comprehensive
	Units	Amount		Units	Amount		Contributions		Deficit		Loss		Total
BALANCES AT JANUARY 1, 2010	2,000	$	1	-	$	-	$	89,505	$	(304,031)	$	(7,000)	$	(221,525)

Dividends	-	-		-	-		(34,073)		(2,400)		-		(36,473		)
Contributions	-	-		-	-		17,598		-		-		17,598

Unrealized gain on interest rate swap	-	-		-	-		-		-		191		191
Gain on interest rate swap reclassified into earnings	-	-		-	-		-		-		6,809		6,809
Net loss	-	-		-	-		-		(18,773)		-		(18,773		)
Total comprehensive loss	-	-		-	-		-		-		-		(11,773		)

BALANCES AT DECEMBER 31, 2010	2,000	1		-	-		73,030		(325,204)		-		(252,173		)

Dividends	-	-		-	-		-		(6,500)		-		(6,500		)
Contributions	-	-		-	-		970		-		-		970
Net income	-	-		-	-		-		3,907		-		3,907
Change in form of organization from a corporation to a limited liability company	(2,000)	(1)		2,000	1		-		-		-		-

BALANCES AT DECEMBER 31, 2011	-	-		2,000	1		74,000		(327,797)		-		(253,796		)

Dividends							-		(4,200)		-		(4,200		)
Contributions							4,825		-		-		4,825
Net income							-		9,375		-		9,375

BALANCES AT DECEMBER 31, 2012	-	$	-	2,000	$	1	$	78,825	$	(322,622)	$	-	$	(243,796	)

49See notes to consolidated financial statements.

~~GOOD SAM ENTERPRISES, LLC AND SUBSIDIARIES~~46

~~CONSOLIDATED~~GOOD ~~STATEMENTS~~SAM OFENTERPRISES, ~~STOCKHOLDER’S~~LLC ORAND ~~MEMBER’S DEFICIT~~SUBSIDIARIES

~~FOR~~CONSOLIDATED ~~THE~~STATEMENTS ~~YEARS~~OF ~~ENDED~~CASH ~~DECEMBER 31, 2011, 2010 AND 2009~~FLOWS

~~(IN~~FOR ~~THOUSANDS~~THE YEARS ENDED DECEMBER 31, ~~EXCEPT~~2012, ~~SHARE/UNIT~~2011 ~~AMOUNTS~~AND 2010 (IN THOUSANDS)

																	Accumulated
	2012		2011			2010
											Stockholder						Other
CASH FLOWS FROM OPERATING ACTIVITIES:
	Common Stock							Member Units			or Member			Accumulated			Comprehensive
Net income (loss)	$	9,375	$	3,907		$	(18,773	)
	Units		Amount					Units	Amount		Contributions			Deficit			Loss			Total
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
BALANCES AT JANUARY 1, 2009	2,000		$		1			-	$	-	$	81,005		$	(257,183	)	$	(10,337	)	$	(186,514	)
Deferred tax benefit	(79)		-			-
Dividends	-		-					-	-		-			(7,900		)	-			(7,900		)
Depreciation	8,919		9,748			10,927
Contributions	-		-					-	-		8,500			-			-			8,500
Amortization	5,538		6,764			7,609
Unrealized gain on interest rate swap	-		-					-	-		-			-			3,337			3,337
(Gain) loss on derivative instrument	(3,871)		(3,899)			6,680
Net loss	-		-					-	-		-			(38,948		)	-			(38,948		)
Provision for losses on accounts receivable	998		808			1,754
Total comprehensive loss	-		-					-	-		-			-			-			(35,611		)
Deferred compensation	-		-			3,074
BALANCES AT DECEMBER 31, 2009	2,000		1					-	-		89,505			(304,031		)	(7,000		)	(221,525		)
(Gain) loss on sale of assets	(1,171)		(632)			(1		)
Dividends	-		-					-	-		(34,073		)	(2,400		)	-			(36,473		)
Loss on debt restructure	-		-			2,678
Contributions	-		-					-	-		17,598			-			-			17,598
Loss on debt repayment	440		-			-
Unrealized gain on interest rate swap	-		-					-	-		-			-			191			191
Accretion of original issue discount	949		861			1,277
Gain on interest rate swap reclassified into earnings	-		-					-	-		-			-			6,809			6,809
Changes in operating assets and liabilities (net of purchased businesses):
Net loss	-		-					-	-		-			(18,773		)	-			(18,773		)
Accounts receivable	651		(3,365)			352
Total comprehensive loss	-		-					-	-		-			-			-			(11,773		)
Inventories	(8,663)		(3,885)			(2,752		)
BALANCES AT DECEMBER 31, 2010	2,000		1					-	-		73,030			(325,204		)	-			(252,173		)
Prepaid expenses and other assets	(1,972)		1,897			(1,069		)
Dividends	-		-					-	-		-			(6,500		)	-			(6,500		)
Accounts payable	(1,046)		7,009			(12,754		)
Contributions	-		-					-	-		970			-			-			970
Accrued and other liabilities	1,199		(1,451)			(3,649		)
Net income	-		-					-	-		-			3,907			-			3,907
Deferred revenues and gains	3,403		(3,278)			(5,946		)
Change in form of organization from a corporation to a limited liability company	(2,000	)	(1			)		2,000	1		-			-			-			-
Net cash provided by (used in) operating activities	14,670		14,484			(10,593		)
BALANCES AT DECEMBER 31, 2011	-		$		-			2,000	$	1	$	74,000		$	(327,797	)	$	-		$	(253,796	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures	(10,512)		(4,900)			(4,543		)
Net proceeds from sale of assets	782		277			662
Intangible domain names acquisition	(376)		-			-
Cash received on loans to affiliate	3,117		-			-
Cash paid on loans to affiliate	(2,500)		(3,117)			-
Net cash used in investing activities	(9,489)		(7,740)			(3,881		)
CASH FLOWS FROM FINANCING ACTIVITIES:
Dividends paid	(4,200)		(6,500)			(36,473		)
Contribution from parent	4,825		970			-
Restricted cash	-		-			8,058
Borrowings on long-term debt	15,255		21,678			485,887
Payment of debt issue costs	-		(699)			(17,481		)
Principal payments of long-term debt	(21,390)		(17,281)			(418,794		)
Net cash (used in) provided by financing activities	(5,510)		(1,832)			21,197
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS	(329)		4,912			6,723
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR	20,275		15,363			8,640
CASH AND CASH EQUIVALENTS AT END OF YEAR	$	19,946	$	20,275		$	15,363

See notes to consolidated financial statements.

5047

GOOD SAM ENTERPRISES, LLC AND SUBSIDIARIES

~~CONSOLIDATED~~NOTES ~~STATEMENTS~~TO OFCONSOLIDATED ~~CASH~~FINANCIAL ~~FLOWS~~STATEMENTS

~~FOR THE~~ YEARS ENDED DECEMBER 31, ~~2011~~2012, ~~2010,~~2011 AND ~~2009 (IN THOUSANDS)~~2010

	2011			2010			2009
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$	3,907		$	(18,773	)	$	(38,948	)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Deferred tax provision	-			-			4,569
Depreciation	9,748			10,927			12,358
Amortization	6,764			7,609			8,718
Impairment loss on goodwill	-			-			46,884
(Gain) loss on derivative instrument	(3,899		)	6,680			(745		)
Provision for losses on accounts receivable	808			1,754			2,945
Deferred compensation	-			3,074			-
Gain on sale of publications	(667		)	-			-
(Gain) loss on sale of assets	35			(1		)	604
(Gain) loss on debt restructure	-			2,678			(4,678		)
Accretion of original issue discount	861			1,277			-
Changes in operating assets and liabilities (net of purchased businesses):
Accounts receivable	(3,365		)	352			4,925
Inventories	(3,885		)	(2,752		)	7,216
Prepaid expenses and other assets	1,976			(1,398		)	(4,254		)
Accounts payable	7,009			(12,754		)	(155		)
Accrued and other liabilities	(1,451		)	(3,649		)	(19,943		)
Deferred revenues and gains	(3,278		)	(5,946		)	(89		)
Net cash provided by (used in) operating activities	14,563			(10,922		)	19,407
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures	(4,900		)	(4,543		)	(3,190		)
Net proceeds from sale of assets	277			662			29
Cash (paid) received on loans to affiliate	(3,196		)	329			-
Net cash used in investing activities	(7,819		)	(3,552		)	(3,161		)
CASH FLOWS FROM FINANCING ACTIVITIES:
Dividends paid	(6,500		)	(36,473		)	(7,900		)
Contribution from parent	970			-			8,500
Restricted cash	-			8,058			(8,058		)
Borrowings on long-term debt	21,678			485,887			28,089
Payment of debt issue costs	(699		)	(17,481		)	(2,541		)
Principal payments of long-term debt	(17,281		)	(418,794		)	(36,304		)
Net cash (used in) provided by financing activities	(1,832		)	21,197			(18,214		)
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	4,912			6,723			(1,968		)
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR	15,363			8,640			10,608
CASH AND CASH EQUIVALENTS AT END OF YEAR	$	20,275		$	15,363		$	8,640

1. Principles of Consolidation – The consolidated financial statements include the accounts of Good Sam Enterprises, LLC (“GSE”), its predecessors, and its subsidiaries (collectively the “Company”), presented in accordance with U.S. generally accepted accounting principles, (“GAAP”), and pursuant to the rules and regulations of the Securities and Exchange Commission. Affinity Group Holding, LLC, a Delaware corporation (“AGHI”), is the direct parent of the Company. Certain balances in the prior year consolidated financial statements were reclassified to conform with the current year presentation. The ultimate parent company of AGHI is AGI Holding Corp. (“AGHC”), a privately-owned corporation. On March 2, 2011, Affinity Group, Inc. (“AGI”) and AGHI converted the form of their organization from corporations to limited liability companies, and their names were changed to Affinity Group, LLC and Affinity Group Holding, LLC, respectively. On May 2, 2011, Affinity Group, LLC changed its name to Good Sam Enterprises, LLC by filing a Certificate of Amendment to its Certificate of Organization with the Secretary of State of Delaware.

~~See~~Description ~~notes~~of the Business – The Company is a membership-based direct marketing company which sells club memberships, products, services, and publications to ~~consolidated~~selected ~~financial~~affinity ~~statements~~groups primarily in North America. The Company markets club memberships, merchandise and services to RV owners, and camping enthusiasts. In addition, the Company operates 93 retail stores and a mail order business selling RV accessories, supplies and services through its wholly-owned subsidiary, Camping World, Inc. (“Camping World”). The stores are located throughout the United States. The Company also operates consumer shows, and publishes magazines and directories.

51Use of Estimates – The preparation of the Company’s consolidated financial statements in conformity with accounting principles generally accepted in the United States requires the Company’s management to make estimates and assumptions that affect the amounts reported in these financial statements and accompanying notes. Actual results could differ from those estimates.

~~GOOD~~Fair ~~SAM~~Value ~~ENTERPRISES,~~Measurement ~~LLC~~– ~~AND~~Fair ~~SUBSIDIARIES~~value is generally defined as the price that would be received to sell an asset or paid to transfer a liability (i.e. the “exit price”) in an orderly transaction between market participants at the measurement date. See Note 9 – Fair Value Measurements.

~~NOTES~~Cash, TOCash ~~CONSOLIDATED~~Equivalents ~~FINANCIAL~~– ~~STATEMENTS~~The Company considers all short-term, highly liquid investments purchased with a maturity date of three months or less to be cash equivalents. The carrying amount approximates fair value because of the short-term maturity of these instruments.

~~YEARS~~Concentration ~~ENDED~~of ~~DECEMBER~~Credit ~~31,~~Risk ~~2011,~~– ~~2010~~The ~~AND~~Company ~~2009~~is potentially subject to concentrations of credit risk in accounts receivable. Concentrations of credit risk with respect to accounts receivable is limited due to the large number of customers and their geographical dispersion.

~~1. Principles~~Inventories ~~of Consolidation~~ – Inventories ~~The~~are ~~consolidated~~stated ~~financial~~at ~~statements~~lower ~~include the accounts~~ of ~~Good~~FIFO ~~Sam Enterprises, LLC~~ (~~“GSE”), its predecessors, and its subsidiaries (collectively the “Company”), presented~~ first-in ~~accordance with U.S. generally accepted accounting principles~~, ~~(“GAAP”~~first-out), ~~and~~cost ~~pursuant~~or ~~to the rules and regulations of the Securities and Exchange Commission~~market. ~~Affinity~~Inventories ~~Group~~primarily ~~Holding,~~consist ~~LLC, a Delaware corporation (“AGHI”), is the direct parent~~ of ~~the~~retail ~~Company. Certain~~travel balances in the prior year consolidated financial statements were reclassified to conform with the current year presentation. The ultimate parent company of AGHI is AGI Holding Corp. (“AGHC”), a privately-owned corporation. On March 2, 2011, Affinity Group, Inc. (“AGI”) and ~~AGHI~~leisure ~~converted~~specialty ~~the form of their organization from corporations to limited liability companies, and their names were changed to Affinity Group, LLC and Affinity Group Holding, LLC, respectively~~merchandise. ~~On May 2, 2011, Affinity Group, LLC changed its name to Good Sam Enterprises, LLC by filing a Certificate of Amendment to its Certificate of Organization with the Secretary of State of Delaware.~~

Description of the Business – The Company is a membership-based direct marketing company which sells club memberships, products, services, and publications to selected affinity groups primarily in North America. The Company markets club memberships, merchandise and services to RV owners, and camping and golf enthusiasts. In addition, the Company operates 82 retail stores and a mail order business selling RV accessories, supplies and services through its wholly-owned subsidiary, Camping World, Inc. (“Camping World”). The stores are located throughout the United States. The Company also operates consumer shows and publishes magazines, directories and books.48

Use of Estimates – The preparation of the Company’s consolidated financial statements in conformity with accounting principles generally accepted in the United States requires the Company’s management to make estimates and assumptions that affect the amounts reported in these financial statements and accompanying notes1. ~~Actual~~ SUMMARY ~~results~~OF ~~could~~SIGNIFICANT ~~differ~~ACCOUNTING ~~from~~POLICIES ~~those estimates.~~(continued)

~~Fair~~Property ~~Value~~and ~~Measurement~~Equipment – Property ~~Fair~~and ~~value~~equipment isare ~~generally~~recorded ~~defined~~at ascost. The ~~the~~Company ~~price~~reviews ~~that~~its ~~would~~property, beplant ~~received~~and toequipment ~~sell~~assets anfor ~~asset~~impairment orwhenever ~~paid~~events toor ~~transfer~~changes ain ~~liability~~circumstances ~~(i.e.~~indicate that the ~~“exit~~carrying ~~price”)~~amount inof an ~~orderly~~asset ~~transaction~~may ~~between~~not ~~market~~be ~~participants~~recoverable. Depreciation atof property and equipment is provided using the ~~measurement~~straight-line ~~date. See~~method ~~Note~~over 9the –following ~~Fair~~estimated ~~Value~~useful ~~Measurements.~~lives of the assets:

Cash, Cash Equivalents and Restricted Cash – The Company considers all short-term, highly liquid investments purchased with a maturity date of three months or less to be cash equivalents. The carrying amount approximates fair value because of the short-term maturity of these instruments. At December 31, 2009, the Company had restricted cash of $8.1 million. The restricted cash included $6.1 million held in escrow to backstop the letters of credit and $2.0 million held in escrow in lieu of issuing a letter of credit and was released from restriction in 2010. The restricted cash is treated as financing activities in the Company’s Consolidated Statement of Cash Flows. There were no restrictions on cash at December 31, 2011 or 2010.

		Years
Leasehold improvements		3-27
Furniture and equipment		3-12
Software		3-5

~~Concentration~~Leasehold ofimprovements ~~Credit~~are ~~Risk~~amortized –over ~~The~~the ~~Company~~useful islives ~~potentially subject to concentrations~~ of ~~credit~~the ~~risk~~assets inor ~~accounts receivable. Concentrations of credit risk with respect to accounts receivable is limited due to~~ the ~~large~~remaining ~~number~~term of ~~customers~~the ~~and~~respective ~~their~~lease, ~~geographical~~whichever ~~dispersion~~is shorter.

~~Inventories~~Goodwill and Other Intangible Assets – ~~Inventories~~ ~~are~~Goodwill ~~stated~~is reviewed at ~~lower~~least ofannually ~~FIFO~~for ~~(first-in~~impairment, ~~first-out)~~and ~~cost~~more oroften ~~market~~when impairment indicators are present (See Note 3 – Goodwill and Intangible Assets). ~~Inventories~~The ~~primarily~~finite-lived ~~consist~~intangible assets consisting of ~~retail~~membership ~~travel~~customer lists and ~~leisure~~deferred ~~specialty~~financing ~~merchandise~~costs with weighted average useful lives of approximately 6 years each.

52Long-lived Assets - Long-lived assets, including capitalized software costs, to be held and used are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Impairment is recognized to the extent the sum of the discounted estimated future cash flows from the use of the asset is less than the carrying value.

1Self-insurance Program – Self-insurance accruals for workers compensation and general liability programs are calculated by a third party and are based on claims filed and include estimates for claims incurred but not yet reported. ~~SUMMARY~~ Projections OFof ~~SIGNIFICANT~~future ~~ACCOUNTING~~loss ~~POLICIES~~are ~~(continued)~~inherently uncertain because of the random nature of insurance claims occurrences and could be substantially affected if future occurrences and claims differ significantly from these assumptions and historical trends.

~~Property~~Long-term ~~and~~Debt – ~~Equipment~~The ~~– Property~~fair ~~and~~value ~~equipment~~of ~~are~~the ~~recorded~~Company’s atlong-term ~~cost. The~~debt ~~Company~~is ~~reviews~~estimated ~~its~~based ~~property,~~on ~~plant~~the ~~and~~quoted ~~equipment~~market ~~assets~~prices for ~~impairment~~the ~~whenever~~same ~~events~~ or ~~changes~~similar inissues ~~circumstances~~or ~~indicate~~on ~~that~~ the ~~carrying~~current ~~amount~~rates offered for debt of anthe ~~asset~~same ~~may~~or ~~not~~similar beremaining ~~recoverable~~maturities. ~~Depreciation~~The offair ~~property~~value ~~and~~of ~~equipment~~the isCompany’s ~~provided~~total ~~using the straight~~long-~~line~~term ~~method~~debt ~~over~~was ~~the~~$360.2 ~~following~~million ~~estimated~~as ~~useful lives~~ of ~~the~~December 31, ~~assets:~~2012.

		Years
Leasehold improvements		3-27
Furniture and equipment		3-12
Software		3-5

Revenue Recognition – Merchandise revenue is recognized when products are sold in the retail stores, shipped for mail and Internet orders, or when services are provided to customers. Roadside Assistance (“RA”) revenues are deferred and recognized over the life of the membership. RA claim expenses are recognized when incurred. Royalty revenue is earned under the terms of an arrangement with a third party credit card provider based on a percentage of the Company’s outstanding credit card balances with such third party credit card provider.

~~Leasehold~~Membership ~~improvements~~revenue is generated from annual, multi-year and lifetime memberships. The revenue and expenses associated with these memberships are deferred and amortized over the ~~useful~~membership ~~lives~~period. For lifetime memberships, an 18-year period is used, which is the actuarially determined estimated fulfillment period. Promotional expenses, consisting primarily of direct mail advertising, are deferred and expensed over the ~~assets~~period orof expected future benefit, typically three months based on historical actual response rates. Renewal expenses are expensed at the ~~remaining~~time ~~term~~related ofmaterials are mailed. Recognized revenues and profit are subject to revisions as the ~~respective~~membership ~~lease~~progresses to completion. Revisions to membership period estimates would change the amount of income and expense amortized in future accounting periods. At December 31, ~~whichever~~2012 isand ~~shorter~~2011, $5.8 million and $5.6 million of advertising expenses have been capitalized as direct-

Goodwill and Other Intangible Assets – Goodwill is reviewed at least annually for impairment, and more often when impairment indicators are present (See Note 3 – Goodwill and Intangible Assets). The finite-lived intangible assets consisting of membership customer lists, non-compete and deferred consulting agreements, and deferred financing costs with weighted average useful lives of approximately 6 years, 15 years and 6 years, respectively.49

Long-lived Assets - Long-lived assets, including capitalized software costs, to be held and used are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable1. ~~Impairment~~ SUMMARY isOF ~~recognized~~SIGNIFICANT toACCOUNTING ~~the~~POLICIES ~~extent the sum of the discounted estimated future cash flows from the use of the asset is less than the carrying value.~~(continued)

~~Self-insurance~~response ~~Program~~advertising, –of ~~Self-insurance~~which ~~accruals~~$3.5 ~~for~~million ~~workers compensation~~ and ~~general~~$3.0 ~~liability~~million, ~~programs~~respectively, ~~are~~were ~~calculated~~reported byas aassets ~~third party~~ and ~~are~~$2.3 ~~based~~million ~~on claims filed~~ and ~~include~~$2.6 ~~estimates~~million, ~~for~~respectively, ~~claims~~were ~~incurred but not yet~~ reported~~. Projections~~ ofnet ~~future loss are inherently uncertain because~~ of ~~the~~related ~~random~~deferred ~~nature~~revenue. Advertising ofexpenses ~~insurance~~for ~~claims~~2012, ~~occurrences~~2011 and ~~could~~2010 bewere ~~substantially~~$26.6 ~~affected~~million, if$28.4 ~~future~~million ~~occurrences~~ and ~~claims~~$24.6 ~~differ~~million, ~~significantly from these assumptions and historical trends~~respectively.

~~Long-term~~Publications ~~Debt –~~Revenue ~~The~~and ~~fair~~Expense ~~value~~– ofNewsstand ~~the~~sales ~~Company’s~~of ~~long-term~~publications ~~debt~~and isrelated ~~estimated~~expenses ~~based~~are onrecorded at the ~~quoted~~time ~~market~~of ~~prices~~delivery, ~~for~~net ~~the~~of ~~same~~estimated orprovision ~~similar~~for ~~issues~~returns. Subscription orsales onof ~~the~~publications ~~current~~are ~~rates~~reflected ~~offered~~in ~~for~~income ~~debt~~over the lives of the ~~same~~subscriptions. The orrelated ~~similar~~selling ~~remaining~~expenses ~~maturities~~are expensed as incurred. ~~The~~Advertising ~~fair~~revenues ~~value~~and ofrelated expenses are recorded at the ~~Company’s~~time ~~total~~of ~~long-term~~delivery. Subscription ~~debt~~and ~~was~~newsstand ~~$326~~revenues and expenses related to annual publications are deferred until the publications are distributed.3 Revenues ~~million~~and asrelated ofexpenses ~~December 31,~~for ~~2011~~consumer shows are recognized when the show occurs.

~~Revenue~~Vendor ~~Recognition~~Allowances – ~~Merchandise~~The ~~revenue~~Company isreceives ~~recognized~~rebates ~~when~~from ~~products~~vendors ~~are~~pursuant ~~sold in the retail stores, shipped for mail and Internet orders, or when services are provided~~ to ~~customers. Emergency~~several ~~Road~~different ~~Service~~types ~~(“ERS”) revenues are deferred and recognized over the life~~ of ~~the membership~~programs. ~~ERS~~Vendor ~~claim~~consideration ~~expenses are recognized when incurred. Royalty revenue~~ is ~~earned~~accounted ~~under~~for ~~the~~as ~~terms of an arrangement with~~ a ~~third~~reduction ~~party credit card provider based on a percentage~~ of the ~~Company’s~~inventory ~~outstanding~~cost ~~credit~~and ~~card~~related ~~balances~~cost ~~with~~of ~~such~~sales ~~third~~when ~~party~~the ~~credit~~inventory ~~card~~is ~~provider~~sold.

~~Membership~~Shipping ~~revenue is generated from annual, multi-year~~ and ~~lifetime~~Handling ~~memberships. The~~Fees ~~revenue~~ and ~~expenses~~Costs ~~associated~~– ~~with~~The ~~these~~Company ~~memberships~~reports ~~are~~shipping ~~deferred~~ and ~~amortized~~handling ~~over~~costs ~~the~~billed ~~membership~~to ~~period. For~~customers ~~lifetime~~as ~~memberships,~~a ancomponent ~~18-year period is used, which is the actuarially determined estimated fulfillment period. Promotional expenses, consisting primarily~~ of ~~direct mail advertising~~revenues, ~~are deferred~~ and ~~expensed over the period of expected future benefit, typically three months based on historical actual response rates. Renewal expenses are expensed at the time~~ related ~~materials~~costs are ~~mailed. Recognized~~reported ~~revenues and profit are subject to revisions~~ as ~~the~~a ~~membership~~component ~~progresses~~of tocost ~~completion. Revisions~~applicable to ~~membership period estimates would change the amount of income and expense amortized in future accounting periods~~revenues. At December 31, 2012, 2011 and 2010, $59.63 million, $7.0 million and $5.87 million of ~~advertising~~shipping ~~expenses~~and ~~have~~handling ~~been~~fees, ~~capitalized~~respectively, were included in the Retail segment as ~~direct-~~revenue.

53Derivative Financial Instruments – The Company accounts for derivative instruments and hedging activities in accordance with accounting guidance for derivative instruments and hedging activities, which states that all derivatives are recognized on the balance sheet at their fair value. On the date that the Company enters into a derivative contract, management formally documents all relationships between hedging instruments and hedged items, as well as risk management objectives and strategies for undertaking various hedge transactions.

~~1. SUMMARY~~Changes OFin ~~SIGNIFICANT~~the ~~ACCOUNTING~~fair ~~POLICIES~~value of a derivative that is highly effective and that is designated and qualifies as a cash flow hedge (~~continued~~a “swap”), to the extent that the hedge is effective, are recorded in accumulated other comprehensive loss, until earnings are affected by the variability of cash flows of the hedged transaction. The Company measures effectiveness of the swap at each quarter end using the Hypothetical Derivative Method. Under this method, hedge effectiveness is measured based on a comparison of the change in fair value of the actual swap designated as the hedging instrument and the change in fair value of the hypothetical swap which would have the terms that identically match the critical terms of the hedged cash flows from the underlying debt. The amount of ineffectiveness, if any, recorded in earnings would be equal to the excess of the cumulative change in the fair value of the swap over the cumulative change in the fair value of the plain vanilla swap, as defined in the accounting literature. The Company’s derivatives that are not designated and do not qualify as hedges are adjusted through current earnings. See Note 8 - Interest Rate Swap Agreements.

~~response~~The ~~advertising,~~Company ofutilizes ~~which~~derivative ~~$3.0~~financial ~~million~~instruments ~~and~~to ~~$3.1~~manage ~~million,~~its ~~respectively,~~exposure ~~were~~to ~~reported~~interest asrate ~~assets and $2~~risks.6 The ~~million~~Company ~~and~~does ~~$2.7~~not ~~million,~~enter ~~respectively,~~into ~~were~~derivative ~~reported~~financial ~~net~~instruments ~~of related deferred revenue. Advertising expenses~~ for ~~2011,~~trading ~~2010 and 2009 were $28~~purposes.~~4 million, $24.6 million, and $25.1 million, respectively.~~

~~Publications~~Income ~~Revenue~~Taxes ~~and Expense~~ – The ~~Newsstand~~Company ~~sales~~recognizes ofdeferred ~~publications~~tax assets and ~~related~~liabilities ~~expenses~~based ~~are~~on ~~recorded at~~ the ~~time~~liability ~~of delivery~~method, ~~net~~which ofrequires ~~estimated~~an ~~provision~~adjustment ~~for~~to ~~returns. Subscription~~the ~~sales~~deferred oftax ~~publications~~asset ~~are~~or ~~reflected~~liability into reflect income ~~over~~tax ~~the~~rates ~~lives~~currently ofin ~~the subscriptions~~effect. ~~The~~When ~~related~~income ~~selling~~tax ~~expenses~~rates ~~are~~increase ~~expensed~~or asdecrease, ~~incurred. Advertising~~a ~~revenues~~corresponding ~~and~~adjustment ~~related~~to ~~expenses~~income ~~are~~tax ~~recorded~~expense atis ~~the~~recorded ~~time~~by ofapplying ~~delivery. Subscription~~the ~~and~~rate ~~newsstand~~change ~~revenues and expenses related~~ to ~~annual publications are deferred until~~ the ~~publications~~cumulative ~~are~~temporary ~~distributed~~differences. ~~Revenues and related expenses for consumer shows are recognized when the show occurs.~~

Vendor Allowances – The Company receives rebates from vendors pursuant to several different types of programs. Vendor consideration is accounted for as a reduction of the inventory cost and related cost of sales when the inventory is sold.50

Shipping and Handling Fees and Costs – The Company reports shipping and handling costs billed to customers as a component of revenues, and related costs are reported as a component of cost applicable to revenues1. At SUMMARY ~~December 31,~~OF ~~2011,~~SIGNIFICANT ~~2010~~ACCOUNTING ~~and~~POLICIES ~~2009, $7.0 million $5.7 million and $5.2 million of shipping and handling fees, respectively, were included in the Retail segment as revenue.~~(continued)

~~Derivative Financial Instruments –~~ The Company ~~accounts~~recognizes ~~for~~the ~~derivative~~tax ~~instruments~~benefit ~~and~~from ~~hedging~~an ~~activities~~uncertain tax position in accordance with accounting guidance ~~for derivative instruments and hedging activities, which states that all derivatives are recognized~~ on ~~the~~accounting ~~balance~~for ~~sheet~~uncertainty atin ~~their~~income ~~fair value~~taxes. OnSee ~~the~~Note ~~date~~7 ~~that~~– ~~the~~Income Company enters into a derivative contract, management formally documents all relationships between hedging instruments and hedged items, as well as risk management objectives and strategies for undertaking various hedge transactionsTaxes.

~~Changes~~Major inCustomers ~~the~~– ~~fair~~Included ~~value~~in ~~of a derivative that is highly effective and that is designated and qualifies as a cash flow hedge (a “swap”), to~~ the ~~extent~~Membership ~~that~~Services ~~the~~segment ~~hedge~~ is ~~effective,~~revenue ~~are~~of ~~recorded~~$13.8 ~~in accumulated other comprehensive loss~~million, ~~until earnings are affected by the variability of cash flows of the hedged transaction~~$14. ~~The~~6 ~~Company~~million ~~measures~~and ~~effectiveness of the swap at each quarter end using the Hypothetical Derivative Method~~$18. ~~Under~~1 ~~this method~~million, ~~hedge~~for ~~effectiveness is measured based on a comparison of~~ the ~~change~~years in2012, ~~fair~~2011 ~~value of the actual swap designated as the hedging instrument~~ and ~~the~~2010, ~~change~~respectively, ~~in fair value of the hypothetical swap~~ which ~~would~~was ~~have~~received ~~the~~under ~~terms~~contracts ~~that~~from ~~identically~~one ~~match~~third ~~the~~party ~~critical~~customer ~~terms~~ of the ~~hedged cash flows from the underlying debt~~Company. ~~The~~For ~~amount~~transactions ofwith ~~ineffectiveness,~~related ~~if any~~parties, ~~recorded~~see in earnings would be equal to the excess of the cumulative change in the fair value of the swap over the cumulative change in the fair value of the plain vanilla swap, as defined in the accounting literature. The Company’s derivatives that are not designated and do not qualify as hedges are adjusted through current earnings. See Note 811 -– ~~Interest~~Related ~~Rate~~Party ~~Swap Agreements~~Transactions.

~~The Company utilizes derivative financial instruments to manage its exposure to interest rate risks~~2. ~~The~~ PROPERTY ~~Company~~AND ~~does not enter into derivative financial instruments for trading purposes.~~EQUIPMENT

~~Income~~Property ~~Taxes – The Company recognizes deferred tax assets~~ and ~~liabilities~~equipment ~~based~~consisted onof the ~~liability~~following ~~method,~~at ~~which~~December 31 ~~requires an adjustment to the deferred tax asset or liability to reflect income tax rates currently~~ (in ~~effect. When income tax rates increase or decrease, a corresponding adjustment to income tax expense is recorded by applying the rate change to the cumulative temporary differences.~~thousands):

	2012			2011

Building and improvements	$	14,247		$	17,520
Furniture and equipment	49,870			47,815
Software	53,885			51,783
Systems development and construction in progress	1,437			2,261
	119,439			119,379
Less: accumulated depreciation and amortization	(95,441		)	(96,816		)
	$	23,998		$	22,563

13. ~~SUMMARY~~ GOODWILL OFAND ~~SIGNIFICANT~~INTANGIBLE ~~ACCOUNTING POLICIES (continued)~~ASSETS

The ~~Company~~following ~~recognizes~~is ~~the~~a ~~tax~~summary ~~benefit~~of ~~from~~changes ~~an uncertain tax position~~ in ~~accordance~~the ~~with accounting guidance on accounting for uncertainty in income taxes. The~~ Company’s ~~reversed~~goodwill ~~$13.2~~by ~~million~~business ofsegment, ~~its liability~~ for ~~unrecognized tax benefits in~~ the ~~third~~years ~~quarter~~ended ofDecember 31, ~~2009~~2012 and ~~the~~2011 ~~remainder~~ (in ~~the third and fourth quarter of 2010 due to statute expirations. See Note 7 – Income Taxes.~~thousands):

Major Customers – Included in the Membership Services segment is revenue of $14.6 million, $18.1 million, and $16.8 million, for the years 2011, 2010 and 2009, respectively, which was received under contracts from one customer of the Company.

	Membership Services		Retail		MS Media		Consolidated

Gross goodwill	$	56,030	$	47,601	$	46,884	$	150,515
Impairment prior to January 1, 2011	(6,086)		(47,601)		(46,884)		(100,571)
Balance as of January 1, 2011	$	49,944	$	-	$	-	$	49,944
Impairment

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